Jacqueline Downes heads the national Competition and Consumer Law Group at Allens. Clients rely on her advice and extensive experience in dealing with the ACCC and other regulators to resolve significant issues for their businesses. Jacqueline is ranked as a leading competition and antitrust expert in Chambers, Best Lawyers, The Asia-Pacific Legal 500 and Global Competition Review. Recent commentary in Chambers Asia-Pacific singles Jacqueline out for her 'knowledge of how the authorities work especially in the merger control space' and describes her as an 'exceptional practitioner' whose 'responsiveness, sharp intelligence and ability to deliver set her apart'.
We had the pleasure of sitting down with Jacqueline recently to discuss key challenges and opportunities facing the industry today.
You can find the full Q&A below.
What are some of the key trends and developments in competition and consumer law having an impact right now?
The major development in competition law is the implementation of the Harper Reforms on 6 November 2017, which include the introduction of a prohibition on anti-competitive concerted practices, an expansion of the prohibition on misuse of market power and significant reforms to the merger control processes. Other trends and developments include the first criminal cartel prosecutions, significant decisions in relation to hub-and-spoke cartels and agency arrangements, a number of market studies and a push from the ACCC for higher penalties.
In relation to consumer law, the ACCC has shifted to enforcement mode in relation to the expanded unfair contract terms regime which now protects small businesses, and is continuing to use the prohibition on unconscionable conduct as a 'catch all' provision to prosecute behaviour which it considers to be unfair or otherwise in breach of the Australian Consumer Law.
What will be some of the ramifications of the concerted practices amendments?
The scope of 'concerted practices' is uncertain. In the EU it has been given a very broad definition and has been used by the European Commission to prosecute a wide range of conduct, including quite novel cases such as public disclosures of pricing information. The Australian version only prohibits concerted practices which have the purpose, effect or likely effect of substantially lessening competition. While this hurdle means the prohibition is unlikely to have as broad a remit as it does in the EU, Australian businesses need to exercise caution particularly in relation to disclosing information to competitors.
How might the relationship between market power and conduct change after the reforms?
The reforms have two consequences: they remove the 'take advantage' of market power limb and introduce an 'effects test'. The immediate impact is that businesses with market power need to assess the potential effect on competition of their strategic decisions. The amendments make it easier for the ACCC to prosecute alleged misuses of market power and we are likely to see increased enforcement activity from the ACCC as it seeks to test the law.
What practical implications might the competition and consumer law reforms have on merger reviews and authorisations?
Parties now have two choices: informal merger review or a new process which combines the unused ACCC formal merger clearance process with the Australian Competition Tribunal authorisation process for mergers. Most merger parties are likely to continue to use the flexible informal clearance route. The reforms have removed direct access to the Tribunal which was becoming an increasingly popular route for complex mergers, such as in the Tabcorp / Tatts merger authorisation. Under the new authorisation process, the ACCC is the first instance decision maker and may authorise a merger where it considers there will be no substantial lessening of competition or there is a net public benefit. The merger parties and those with a sufficient interest in the decision have a right to merits review in the Tribunal. Although the broader test for merger authorisation may make this route appealing to some merger parties, it is a less flexible process than informal review and likely to be protracted if the matter proceeds to a review before the Tribunal.
What should practitioners keep in mind related to cartel conduct and the joint venture exception?
Following the Flight Centre decision, practitioners are increasingly having to grapple with the possibility of distribution arrangements being caught by the cartel conduct rules. This is quite novel, as most jurisdictions consider vertical restraints on a rule of reason basis.
Although the revised JV exception will now apply to a broader range of JVs, there are additional requirements that may make it harder to rely on. Under the new law, the cartel provision will not only need to be for the purpose of the JV, it will also need to be reasonably necessary for undertaking the JV. This second limb is intended to narrow the exception but it is unclear how this will be applied.
You can hear more from Jacqueline at the Competition and Consumer Law: The New Regime seminar, being held on Thursday 22 March at the UNSW CBD Campus, Sydney.