7.11 Restrictive trade practices
Part IV of the Trade Practices Act 1974 (external link) (Cth) (TPA) prohibits restrictive trade practices. Restrictive trade practices include price fixing, boycotts, misuse of market power, exclusive dealing, resale price maintenance and contracts arrangements or understandings which lead to a substantial lessening of competition in a particular market. These practices generate anti-competitive outcomes.
Since 21 July 1996, the Crown in right of Queensland has been bound by Part IV of the TPA and its Queensland counterpart, the Competition Code, to the extent that it carries on a business. Therefore, Government Boards which are part of the Crown are no longer protected by Crown immunity and are now also bound by Part IV. Government Boards which are not part of the Crown continue to be bound by Part IV as before.
Penalties for breaching Part IV are substantial, with fines of up to $10,000,000 per offence for bodies corporate. Officers and members of Government Boards who are involved in a contravention of Part IV may also be fined up to $500,000 per offence. Persons who suffer loss as a result of unlawful behaviour may seek damages, and injunctions may also be granted to restrain illegal activities.
Members of Government Boards need to ensure that:
- they are familiar with the provisions of Part IV, so as to avoid engaging in unlawful behaviour in that capacity;
- the Board complies with its obligations under Part IV and the Competition Code (this will be particularly important where the Board is engaging in trading, commercial or business activities); and
- the Board implements an adequate trade practices compliance program to minimise the risk of contravening Part IV. This should be developed in consultation with the Board's legal advisers.
There is provision for a Board to engage in conduct which would otherwise breach Part IV, either by giving notice of the conduct to the Australian Competition and Consumer Commission (external link) (ACCC), or by seeking authorisation from the ACCC. Government Boards which are subject to control or direction from the Government must obtain approval from Cabinet, via the relevant portfolio Minister, before taking either of these steps (after having consulted with Treasury's Economic Performance Division which is responsible for ensuring whole of Government compliance).
Last reviewed: 17 July, 2009
Last updated: 22 July, 2009
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