Section 46: Its Purpose and the Proposed New Effects Test 

Abstract

The Competition and Consumer Amendment (Misuse of Market Power) Bill 2016, if passed, give effect to the Harper Report recommendation to introduce an effects test for Australia’s misuse of market power prohibition to replace the existing purpose-based test. This proposed change has generated more political debate and public commentary than any other aspect of the proposed Harper Reforms.

This article examines the convoluted process which has led to the current reform bill, before identifying the object of Australia’s misuse of market power law and examining the existing and proposed laws against that objective. It will conclude that the existing law is misdirected as a matter of policy and is ineffective in practice. The proposed law would, by removing the ‘take advantage’ element and shifting the focus from competitors to competition, be more aligned with the object of the provision and with international best practice.

Keywords: Misuse of Market Power, Abuse of Power, Abuse of Dominance, Effects Test, Harper Review

JEL Classification: K21