From 6 November 2017, the ACCC is able to make class exemptions for specific types of business conduct. This is when we are satisfied that all the circumstances are unlikely to substantially lessen competition or are likely to result in a net public benefit.
Part IV of the Competition and Consumer Act 2010 relates to restrictive trade practices and includes provisions that protect and enhance competition.
A class exemption issued by the ACCC specifies that one or more provisions of Part IV of the Act do not apply. In effect it provides a ‘safe harbour’, allowing businesses to engage in conduct of the specified kind without risk of breaching the relevant provisions of Part IV of the Act.
A class exemption removes the need for businesses to lodge individual applications for authorisation or notifications with the ACCC in order to engage in the specified conduct. Once an exemption is in place, businesses will be able to self-assess whether their proposed conduct falls within the terms of the class exemption such that they can proceed without authorisation or notification. If their conduct is outside the scope of the class exemption, they will not have the protection of the class exemption and will need to consider whether they should apply for authorisation or lodge a notification with the ACCC.
The new class exemption provisions are in Division 3 of Part VII of the Act. A decision to make a class exemption is subject to the parliamentary disallowance process.
The ACCC may issue a class exemption if it is satisfied in all circumstances that conduct of the kind specified:
- would not have the effect, or would not be likely to have the effect, of substantially lessening competition, or
- would result, or would be likely to result, in a benefit to the public that would outweigh the detriment to the public that would result, or would be likely to result, from the conduct.
In its determination on a class exemption, the ACCC may specify one or more of the following limitations:
- a limitation to persons of a specified kind
- a limitation to circumstances of a specified kind
- a limitation to conduct that complies with specified conditions.
The ACCC will identify types of conduct for class exemptions. While businesses do not apply for a class exemption they may wish to suggest options to the ACCC. The ACCC will consider such requests taking account of other organisational priorities.
The ACCC will consult with a wide range of interested parties as it develops a particular class exemption. Interested parties will have an opportunity to make submissions during that process.
Class exemptions are made by the ACCC in the form of legislative instruments and are subject to disallowance by Parliament.
There are currently no class exemptions in place. As they are developed, they will be displayed on the ACCC website and also on the Federal Register of Legislation, where they will each be accompanied by an explanatory statement.
The ACCC will specify the time period for which a class exemption will be in force. The maximum period is 10 years.
The ACCC may vary or revoke a class exemption. We would generally consult before doing so except, for example, in the case of a minor or technical variation.
The ACCC may withdraw the benefit of a class exemption from a particular business where it is satisfied the conduct would be likely to substantially lessen competition or would be likely to result in a benefit to the public that does not outweigh the detriment to the public.
The ACCC would expect to notify the business and provide it with an opportunity to be heard before deciding to do so, in addition to broader market consultation. The ACCC will provide the business with a written statement of reasons, should it decide to withdraw the benefit of the class exemption for that business.
The effect of withdrawal will be to remove protection from the specified provisions of Part IV of the Act for conduct by that business.
A decision to withdraw the benefit of a class exemption in a particular case is subject to review by the Australian Competition Tribunal.
Further information can be obtained by contacting the ACCC at email@example.com