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A Bill for an Act to amend the Trade Practices Act 1974 to give the Australian Competition and Consumer Commission power to deal with any price exploitation arising from changes in the regulation of credit card fees, and for related purposes
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Introduced HR 23 Sep 2002

Trade Practices Amendment (Credit Card Reform) Bill 2002
First Reading

2002

The Parliament of the

Commonwealth of Australia

HOUSE OF REPRESENTATIVES

Presented and read a first time

Trade Practices Amendment (Credit Card Reform) Bill 2002

No. , 2002

(Mr Griffin)

A Bill for an Act to amend the Trade Practices Act 1974 to give the Australian Competition and Consumer Commission power to deal with any price exploitation arising from changes in the regulation of credit card fees, and for related purposes

Contents

1       Short title 1

2       Commencement 2

3       Schedule 2

Schedule 1--Amendment of the Trade Practices Act 1974       3

A Bill for an Act to amend the Trade Practices Act 1974 to give the Australian Competition and Consumer Commission power to deal with any price exploitation arising from changes in the regulation of credit card fees, and for related purposes

The Parliament of Australia enacts:

1 Short title

        This Act may be cited as the Trade Practices Amendment (Credit Card Reform) Act 2002.

2 Commencement

        This Act commences on the day on which it receives the Royal Assent.

3 Schedule

        Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1--Amendment of the Trade Practices Act 1974

1 After paragraph 2B(1)(aa)

Insert:

       (ac) Part VBB;

2 Subsection 5(1)

After "Part VBA", insert ", Part VBB".

Note:       The heading to section 5 is altered by inserting ", VBB" after "VBA".

3 Paragraph 6(2)(b)

Omit "and 75AZAF", substitute ", 75AZAF, 75AZAI, 75AZAJ, 75AZAK, 75AZAL and 75AZAM".

Note:       The heading to section 6 is altered by inserting ", VBB" after "VBA".

4 After Part VBA

Insert:

Part VBB--Price exploitation in relation to credit card reform

75AZAH Definitions

        In this Part, unless the contrary intention appears:

credit card reform changes means any regulatory changes by the Reserve Bank applying to the operation of credit card schemes which have effect from 30 June 2003 to the end of the credit card reform transition period.

credit card reform transition period means the period ending three years after the commencement of this Act.


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credit card services includes services for which interchange fees, merchant service fees and other related fees are payable.

interchange fees means the fees paid to financial institutions that issue credit cards by financial institutions that provide credit card services to merchants.

merchant service fees means the fees paid by merchants to financial institutions for the supply of credit card services.

price, in relation to a supply, includes:

       (a) a charge of any description for the supply; and

       (b) any pecuniary or other benefit, whether direct or indirect, received or to be received by a person for or in connection with the supply.

supply means a supply of credit card services to merchants.

75AZAI Price exploitation in relation to credit card reform

       (1) A corporation contravenes this section if it engages in price exploitation in relation to credit card reform changes.

       (2) For the purposes of this section, a corporation engages in price exploitation in relation to credit card reform changes if:

       (a) it makes a supply during the credit card reform transition period; and

       (b) the price for the supply is unreasonably high, having regard alone to credit card reform changes (in so far as they have taken effect); and

       (c) the price for the supply is unreasonably high even if the following other matters are also taken into account:

       (i) the supplier's costs; and

       (ii) supply and demand conditions; and

       (iii) any other relevant matter.

75AZAJ Price exploitation--guidelines about when prices contravene section 75AZAI

       (1) The Commission may, by written instrument, formulate guidelines about when prices for supplies may be regarded as being in contravention of section 75AZAI.

       (2) The Commission may, by written instrument, vary the guidelines.

       (3) The Commission must have regard to the guidelines in making decisions under section 75AZAK or 75AZAL in relation to the issue, variation and revocation of notices under that section.

       (4) The Court may have regard to the guidelines in any proceedings:

       (a) under section 76 relating to section 75AZAI; or

       (b) under section 80 for an injunction relating to section 75AZAI.

       (5) As soon as practicable after making or varying the guidelines, the Commission must cause a copy of the guidelines, or of the variation, to be published in the Gazette. However, failure to do so does not affect the validity of the guidelines or of the variation.

75AZAK Commission may issue notice to corporation it considers has contravened section 75AZAI

       (1) If the Commission considers that a corporation has made a supply in contravention of section 75AZAI, the Commission may give the corporation a notice in writing under this section.

       (2) The notice must:

       (a) be expressed to be given under this section; and

       (b) identify:

       (i) the corporation that made the supply; and

       (ii) the kind of supply made; and

       (iii) the circumstances in which the supply was made; and

       (c) state that, in the Commission's opinion:

       (i) the price for the supply was unreasonably high as mentioned in paragraph 75AZAI(2)(b); and

       (ii) that unreasonably high price was not attributable to matters referred to in paragraph 75AZAI(2)(c).

       (3) In any proceedings:

       (a) under section 76 relating to section 75AZAI; or

       (b) under section 80 for an injunction relating to section 75AZAI;

the notice is taken to be prima facie evidence that:


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       (c) the price for the supply was unreasonably high as mentioned in paragraph 75AZAI(2)(b); and

       (d) that unreasonably high price was not attributable to matters referred to in paragraph 75AZAI(2)(c).

       (4) The Commission may vary or revoke the notice on its own initiative or on application made by the corporation. The Commission must give the corporation notice in writing of the variation or revocation.

75AZAL Commission may issue notice to aid prevention of price exploitation

       (1) The Commission may give a corporation a notice in writing under this section if the Commission considers that doing so will aid the prevention of price exploitation (within the meaning of section 75AZAI).

       (2) The notice must:

       (a) be expressed to be given under this section; and

       (b) be expressed to relate to any supply that the corporation makes that is:

       (i) of a kind specified in the notice; and

       (ii) made in circumstances specified in the notice; and

       (iii) made during the period specified in the notice (which must not be a period ending after the end of the credit card reform transition period); and

       (c) specify the maximum price that, in the Commission's opinion, may be charged for a supply to which the notice is expressed to relate.

       (3) The Commission may, on its own initiative or on application made by the corporation:

       (a) vary the notice to:

       (i) change the period specified as required by subparagraph (2)(b)(iii); or

       (ii) change the price specified in the notice as required by paragraph (2)(c); or

       (b) revoke the notice.

The Commission must give the corporation notice in writing of the variation or revocation.

       (4) The Commission may publish the notice, or particulars of any variation or revocation of the notice, in such manner as the Commission considers appropriate, including, for example, in a national newspaper.

75AZAM Commission may monitor prices

       (1) The Commission may monitor prices for either or both of the following purposes:

       (a) to assess the general effect of credit card reform changes on prices charged by corporations for supplies during the credit card reform transition period;

       (b) to assist its consideration of whether section 75AZAI has been, is being, or may in the future be, contravened.

       (2) A member of the Commission may, by notice in writing served on a person, require the person:

       (a) to give the Commission specified information in writing signed by:

       (i) the person; or

       (ii) if the person is a body corporate--a competent officer of the body corporate; or

       (b) to produce to the Commission specified documents;

being information, or documents containing information, relating to prices or the setting of prices that the member considers will or may be useful to the Commission in monitoring prices as mentioned in subsection (1).

Note:       The powers under this section are in addition to the powers under section 155. Under section 155, the Commission may obtain information about particular matters that constitute or may constitute a contravention of section 75AZAI.

       (3) Without limiting subsection (2), information or documents that may be required under that subsection may relate to prices, or the setting of prices:

       (a) before or after all or any credit card reform changes have taken effect; and

       (b) before or after the start of the credit card reform transition period; and

       (c) in a situation, or during a period, specified in the notice.


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       (4) A person must not:

       (a) refuse or fail to comply with a notice under subsection (2) to the extent that the person is capable of complying with it; or

       (b) in purported compliance with such a notice, intentionally or recklessly provide information or a document that is false or misleading.

Penalty:       20 penalty units.

75AZAN Reporting

       (1) The Commission must, within 28 days after the end of each quarter, give the Minister a written report about the operations of the Commission under this Part during the quarter.

       (2) Without otherwise limiting subsection (1), a report under that subsection must include particulars of:

       (a) all notices given under section 75AZAL during the quarter; and

       (b) all variations or revocations during the quarter of notices given under section 75AZAL.

       (3) For this purpose, a quarter is a period of 3 months:

       (a) that occurs wholly or partly during the credit card reform transition period; and

       (b) that starts on any of the following days in a year:

       (i) 1 January;

       (ii) 1 April;

       (iii) 1 July;

       (iv) 1 October.

       (4) Within 10 sitting days of receipt of a report under subsection (1), the Minister must table that report in Parliament.

       (5) If this section commences during a quarter (but not on the first day of a quarter):

       (a) no report is to be made at the end of the quarter; but

       (b) the report made at the end of the next quarter is also to include the information required by subsection (1) in relation to the previous quarter.

5 Subsection 75B(1)

Omit "or 75AZAB", substitute ", 75AZAB or 75AZAI".

6 Subparagraph 76(1)(a)(ii)

Omit "or 75AZAB", substitute ", 75AZAB or 75AZAI".

7 Subparagraph 78(a)(ii)

Omit "or 75AZAB", substitute ", 75AZAB or 75AZAI".

Note:       The heading to section 78 is altered by omitting "or 75AZAB" and substituting ", 75AZAB or 75AZAI".

8 Subparagraph 80(1)(a)(ii)

Omit "or 75AZAB", substitute ", 75AZAB or 75AZAI".

9 At the end of subsection 80(1A)

Omit "or 75AZAB", substitute ", 75AZAB or 75AZAI".

10 After section 80C

Insert:

80D Section 75AZAI contraventions--orders limiting prices or requiring refunds of money

        Without limiting the generality of section 80, where, on the application of the Commission, the Court is satisfied that a person has engaged in conduct constituting a contravention of section 75AZAI, the Court may make either or both of the following orders:

       (a) an order requiring that person, or a person involved in the contravention, not to make a supply of a kind specified in the order for a price in excess of the price specified in the order while the order remains in force;

       (b) an order requiring that person, or a person involved in the contravention, to refund money to a person specified in the order.

11 Subsections 84(1) and (3)

After "VBA", insert ", VBB".

12 Subsections 155AA(1) and (2)

Omit "or protected Part VBA information", substitute ", protected Part VBA information or protected Part VBB information".

Note:       The heading to section 155AA is altered by omitting "or VBA" and substituting ", VBA or VBB".

13 Subsection 155AA(3)

Insert:

protected Part VBB information means:

       (a) information that:

       (i) was obtained by the Commission under section 155; and

       (ii) relates to a matter arising under Part VBB; or

       (b) information that was obtained by the Commission under section 75AZAM.

14 After subparagraph 163A(1)(a)(ia)

Insert:

       (ic) Part VBB;