A Bill for an Act to protect competitive markets by prohibiting predatory pricing
The Parliament of Australia enacts:
1 Short title
This Act may be cited as the Trade Practices Amendment (Predatory Pricing) Act 2007.
2 Commencement
This Act commences on the day on which it receives the Royal Assent.
3 Schedule(s)
Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.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 At the end of section 46
Add:
(8) Where a corporation is held to have breached section 46AA of this Act, the corporation shall not be held also to have breached this section with respect to the same conduct.
2 After section 46
Insert:
46AA Predatory pricing
(1) A corporation must not engage in predatory pricing in:
(a) a market for groceries; or
(b) a market for the sale of fuel; or
(c) a market for pharmaceutical products, proprietary medicines and toiletries.
(2) For the purposes of this section:
cost means the average total (fixed plus variable) cost of producing and supplying the goods or services.
fuel has the meaning given in section 4 of the Excise Act 1901.
pharmaceutical product means a drug or medicinal preparation, including but not restricted to those drugs or medicinal preparations to which section 85 of the National Health Act 1953 applies.
predatory pricing occurs when a corporation that has a substantial degree of power in a market, or substantial financial power in a market, offers goods or services for sale in a market at unreasonably low prices, with the purpose or effect of substantially lessening competition in that market or the purpose or effect of eliminating competitors.
(3) Without limiting the generality of subsections (1) and (2), in considering whether a corporation has engaged in predatory pricing, the Court may have regard to:
(a) whether the goods or services are offered at a price less than their cost; and
(b) the price for which competitors of the corporation are offering the same goods or services; and
(c) the period of time for which the goods or services are offered at an unreasonably low price; and
(d) whether the corporation is offering the same goods or services in other markets for higher prices; and
(e) the extent of competition in the market.
(4) A corporation may be held to have engaged in predatory pricing even where the corporation has no intention of recouping the costs of its predatory conduct.
(5) The reference in subsection (2) to a competitor includes a reference to competitors generally, or to a particular class or classes of competitors.