Certain business practices that limit or prevent competition are against the law. It is important that businesses understand their rights and obligations at all times and, in particular, when dealing with wholesalers, suppliers and other businesses.
Section 45 of the Competition and Consumer Act prohibits contracts, arrangements, understandings or concerted practices that have the purpose, effect or likely effect of substantially lessening competition in a market, even if that conduct does not meet the stricter definitions of other anti-competitive conduct such as cartels.
Businesses that make agreements with their competitors to fix prices, rig bids, share markets or restrict outputs are breaking laws and stealing from consumers and businesses by inflating prices, reducing choices and damaging the economy.
It is against the law for businesses to fix prices, restrict outputs or allocate customers, suppliers or territories. But the ACCC can grant businesses an exemption providing protection from legal action under the Competition and Consumer Act when such conduct results in benefits to the public.
Broadly speaking, exclusive dealing occurs when one person trading with another imposes some restrictions on the other’s freedom to choose with whom, in what, or where they deal. Exclusive dealing is against the law only when it substantially lessens competition.
A business with a substantial degree of power in a market is not allowed to engage in conduct that has the purpose, effect or likely effect of substantially lessening competition in a market. This behaviour is referred to as ‘misuse of market power’. It is not illegal to have, or to seek to obtain market power by offering the best products and services.
Unconscionable conduct is generally understood to mean conduct which is so harsh that it goes against good conscience. Under the Australian Consumer Law, businesses must not engage in unconscionable conduct, when dealing with other businesses or their customers