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Restrictive Trade Practices

The Part VI of the ICCC Act also empowers the ICCC to authorise certain prohibited business practices and arrangements which might be otherwise anti-competitive, on public benefit grounds.

The role of authorisation of restrictive trade practices (s.70) is to enable proposed conduct that would otherwise be in breach of the Market Conduct Rules to be exempted. The basis for this exemption is that the conduct creates sufficient public benefits that it is desirable, even though it may also give rise to some anti-competitive effects.

The ICCC Act provides for authorisation for the following conduct under Section 70(1) – (8):

  • Agreements that substantially lessen competition (s.50)
  • Covenants that substantially lessen competition (s.51)
  • Price Fixing agreements that are deemed to lessen competition(s.53)
  • Exclusionary provisions (Primary Boycott) (s.52)
  • Resale price maintenance (s.59 and s.60)

Before lodging an authorisation application, businesses are encouraged to approach the ICCC for guidance, on an informal basis, as soon as there is a real likelihood that a potential anti-competitive would be entered into, and this should be done well before the completion of an acquisition.

A formal approval by the ICCC would provide legal certainly to parties to an arrangement to proceed with their plans without risking a contravention of the ICCC Act.