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PROHIBITED BUSINESS PRACTICE

Businesses need to know that the Market Conduct Rules sets out a number of types of commercial conduct or arrangements which are prohibited by the Act because they are harmful to competition.

The Market Conduct Rules apply to everybody. The rules refer to things being done by 'persons', which includes corporations and bodies corporate as well as natural persons or individuals. The Market Conduct Rules apply to the State, but only insofar as it engages in trade.

The rules also apply to State authorities. While the rules apply throughout Papua New Guinea, they also apply to conduct outside Papua New Guinea which is engaged in by anyone who is resident or carries on business in Papua New Guinea, but only to the extent that the conduct affects a market in Papua New Guinea.

The rules apply to corporations as well as individuals. Businesses operate through their action officers, employees or agents. The actions of those persons, when acting within the scope of their actual or apparent authority, or when someone is acting with the consent of one of those persons, is deemed by the Act to also be the conduct of the corporation, and is punishable accordingly. This means that, in complying with the market conduct rules, businesses need to be aware that the actions of their employees or agents must comply with the rules, just as much as the company's management is required to do likewise under the rules of law.

Contravention of Market Conduct Rules can result in proceedings being taken for, amongst other things, pecuniary penalties, injunctions and damages. As the enforcement agency, the ICCC can initiate actions for pecuniary penalties and injunctions. The ICCC Act is also self-enforcing, in that parties who have suffered loss or damage may institute private actions for damages or injunction against those who have breached the Act.

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.