The Competition and Consumer Act generally requires businesses to act independently of their competitors when making decisions about pricing, which firms they do business with, and the terms and conditions of doing business. Competitors who act collectively in these areas are at risk of breaching the competition provisions of the Act.
Collective bargaining is an arrangement where two or more competitors come together to negotiate with a supplier or a customer over terms, conditions and prices. A group of businesses may sometimes appoint a representative, such as an industry association, to act on its behalf in the negotiations.
A collective boycott occurs when a group of competitors agree not to acquire goods or services from, or not to supply goods or services to, a business with whom the group is negotiating, unless the business accepts the terms and conditions offered by the group.
In some circumstances, allowing collective arrangements may be in the public interest. For example smaller businesses can face challenges when negotiating with larger businesses and the outcomes from these negotiations may not be the most efficient or optimal. By getting together, small businesses may have a better opportunity to have input into negotiations than if they stay on their own.
The Act therefore allows protection from legal action to be granted to parties to engage in anti-competitive conduct, including collective bargaining, when there are public benefits that would outweigh the detriments to competition.
Applying for exemptions - protection from legal action where the public benefit outweighs any public detriment.