EXPLANATORY STATEMENT

Select Legislative Instrument 2008 No. 16

Issued by the Authority of the Minister for Competition Policy and Consumer Affairs

Trade Practices Act 1974

Trade Practices Amendment Regulations 2008 (No. 1)

Section 172 of the Trade Practices Act 1974 (the Act) provides, in part, that the Governor‑General may make regulations, not inconsistent with the Act, prescribing all matters that are required or permitted by the Act to be prescribed or are necessary or convenient to be prescribed for carrying out or giving effect to the Act, including prescribing the fees payable to the Australian Competition and Consumer Commission (ACCC) on giving a prescribed notice.

The purpose of the Regulations is to amend the Trade Practices Regulations 1974 (the Principal Regulations) to temporarily extend time periods applicable to the collective bargaining notification regime, which was established under section 93AB of the Act on 1 January 2007, so that businesses and the ACCC have additional time to become familiar with, and develop processes related to, the regime. This would be a transitional arrangement until 31 December 2008.

Section 45 of the Act prohibits contracts, arrangements or understandings that contain an exclusionary provision or that have the purpose, or likely affect, of substantially lessening competition.

However, section 93AB of the Act provides for a collective bargaining notification regime. Under this regime, competitors may notify the ACCC of an agreement between them as to the terms of supply or acquisition of goods or services to another business. If the notice meets the requirements of section 93AB and the ACCC does not object to it within 14 days or such longer period as is prescribed by regulations, the notification comes into force and the agreement is exempt from the prohibitions contained in section 45 of the Act.

Regulation 28 and Schedule 1B of the Principal Regulations currently provide that the fee applicable to making a collective bargaining notification is $1,000. However, a concessional fee of $0 may be applied to an additional related collective bargaining notice where the additional notice is lodged within a specified time of the making of the first notice.

The Regulations amend the Principal Regulations to extend the period for lodging notices after a collective bargaining notice comes into force, from 14 days to 28 days. This only applies to notices lodged after the commencement of the Regulations and before 1 January 2009.

The Regulations also extend the period of time in which an additional related collective bargaining notice can be lodged and remain eligible for a concessional fee from 14 days to 28 days, until the end of 31 December 2008.

The Principal Regulations extended the relevant time periods from 14 days to 28 days during the first year of the new collective bargaining regime’s operation (from 1 January 2007 to 31 December 2007). However, only six notifications were made during that time and it is considered that the extended time periods should apply until the end of 31 December 2008 to allow business and the ACCC additional time to become familiar with, and develop processes related to, the new regime.

Details of the Regulations are set out in the Attachment. The Regulation commenced on the day after they were registered on the Federal Register of Legislative Instruments. The Regulations were developed in consultation with the ACCC.

Details of the Trade Practices Amendment Regulations 2008 (No. 1)

Regulation 1 specifies the name of the Regulations as the Trade Practices Amendment Regulations 2008 (No. 1).

Regulation 2 provides that the Regulations commence on the day after they are registered.

Regulation 3 provides that Schedule 1 amends the Trade Practices Regulations 1974 (Principal Regulations).

Regulation 4 provides that item 1 of Schedule 1 applies to an additional notice given on or after the day the Regulations commence. Regulation 4 also provides that the meaning of additional notice in the amendment made by item 1 of Schedule 1 has the same meaning as the definition of additional notice provided in paragraph (c) of subregulation 28(7) of the Principal Regulations.

Schedule 1 – Amendments

Item 1 Subregulation 28(6A) of the Principal Regulations sets out the circumstances when a concessional fee is payable to the ACCC. This item deletes ‘2007’ and inserts ‘2008’ under subregulation 28(6A) to extend the period of time in which an additional related collective bargaining notice can be eligible for a concessional fee from 14 days to 28 days, until the end of 31 December 2008.

Item 2 Regulation 72 of the Principal Regulations sets out when a collective bargaining notice comes into force and ceases to be in force. This item amends regulation 72 to extend the period of time after which a collective bargaining notice comes into effect from 14 days to 28 days, after the commencement of this regulation and before 1 January 2009.