Competition Law

Competition Law

Pricing cartels, predatory pricing, misusing market power and restraint of trade practices are all prohibited in Australia through competition law. The purpose of the law is to ensure that competition is encouraged and maintained in our economy and that there is not a substantial lessening of competition in any one market. It effectively prevents the big guys from squashing the little guys primarily based on their wealth and power.

An organisation does not have to be a major corporation to have market power. Smaller more specialist businesses can have market power in that specialist industry. The test when establishing misuse of market power is first whether the organisation has market power, the second test is whether the activity in question has the likely effect of substantially lessening competition in that market.

If you are a larger organisation with market power or a specialist organisation with market power it is important that a compliance program or training is provided to staff to ensure that the market power you have is not misused, often inadvertently.

If you are a smaller organisation that is impacted by the behaviour of a larger organisation, it maybe that the behaviour is prohibited and steps can be taken to have the behaviour discontinued and in some cases the organisation and or its Directors punished for that behaviour.

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