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The Australian parliament introduced the competition and consumer law as an act in the year 2010. Earlier, it was known as the ‘trade practices act 1974’. In those days competitive markets for goods and services went very irregular, unfair trading practice were rampant and prices fluctuated every day. It was important at that time, to regularize these irregularities and provide an environment for fair competition, fair trading and security to consumers. The competition and consumer law was introduced with these factors in mind and is administered by the Australian Competition and Consumer Commission (ACCC). Part of the administrative part went to the private sector. The law itself is limited by section 51 of the Australian constitution. The competition and consumer law is also known as CCA 2010 or Competition and Consumer Act of 2010.
Private and public complaints made in relation to this act are looked into by the Australian Federal Court. Further, the Australian Consumer Law (ACL) is defined by schedule 2 of the CCA or Competition and Consumer Act of 2010. Being an act of the Australian parliament, it is governed by section 51 of the Australian constitution for all purposes. The main purpose of section 51 of the Australian constitution is to call out the jurisdictions of the Australian federal and state parliaments. It is for this reason that the competition and consumer act 2010 (CCA) is intended to apply only to business corporations and relying heavily on section 51(xx). Some parts of the CCA rely on section 51(v) (territories power) of the constitution – a good example of this is the telecommunications power.
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The ACL is also applied to individuals by channeling it through the Australian ‘Fair Trading Act’ in each state and territory. The ACL provides some level of immunity to the Commonwealth, state and territories but this does not extend to third parties who deal with the Australian government at any level. Four organizations were put up by the CCA for administration of the law. They are:
Access to facilities of national significance is defined by part IIIa of the CCA with the intention to promote healthy competition in "upstream" and "downstream" markets. Some good examples are access to the national electricity grids or natural gas pipelines. The ACCC and the national Competition Council take an active part in monitoring these functions.
Part IV of the CCA deals with the Antitrust or Restrictive Trade Practices. This part deals with discouraging businesses that engage in restricting free trade practices. Engaged by the ACCC (Australian Competition and Consumer Commission) which can pursue cases related to this section of CCA in the Australian Federal Court and seek penalties of upto $10 million for enterprises and upto $500,000 for individuals.
The Australian government can suggest industry codes by virtue of part IVB of CCA. Any divergence from these codes is considered to be a breach of CCA. Compliance to these codes is monitored by the ACCC. Three codes have been defined so far:
The CCA is authorized to provide exemptions which are based on evaluation certain factors like public benefits & anti-competitive detriments of conduct. This kind of legislation does not exist in any other country. Such exemptions are provided through a process of 'notification' or 'authorization' and a record of such exemptions provided are maintained by the ACCC.
The ACCC is authorized by part VIIa of CCA to review prices of some goods and services in Australia. It can inquire about supply of such goods and servics and discuss them in public. It can review price rises on 'notified' goods and can also monitor costs and profits of certain goods and services. But the ACCC does not fix prices due to which it has been often referred to as the 'toothless watchdog'.
The decisions of the ACCC (Australian Competition and Consumer Commission) can be reviewed by the Australian Competition Tribunal through part IX of CCA. The ACT itself was established vide part III of CCA.
Liner shipping is exempted from the competition provisions of part IV of CCA, as per part X of the same. Shipping operators can review and fix prices, gather revenues and make provisions to handle losses after due registration with the registrar of liner shipping.
CCA also regulates the telecommunications market. Telstra, which owns the copper network infrastructure was earlier owned by the government but has since been privatized. The telecommunications market was partly deregulated which paved the way for Optus to emerge as a competitor to Telstra. Deregulation continued through 1997 and more corporations were allowed to enter the telecommunications market. Due to conditions that exist in the Australian telecommunications market, sections XIB (deals with anti-competitive conduct) and XIC (promotes the interests of consumers of telecom services) of CCA were designed so that even competing telecommunications businesses get access to Telstra's networks.
Provision of the Australian Consumer Law (ACL) allows for inteference during market failures caused due to low consumer power or unavailability of information. Parts of schedule 2 deals with
- Unfair Practices, unconscionable conduct, misleading or deceptive conduct and unfair contracts - Chapter 2 and Part 3-1
- Conditions and Warranties in Consumer Transactions – Part 3-2
- Product safety and information - Part 3-3
- Product Liability - Part 3-5
One of the most important factors of the CCA is how it deals with misleading or deceptive conduct. These factors were dealt with, initially by section 18 of the act and later on moved to section 52. Corporations that engage in misleading or unfair trade practices can be prosecuted by the ACCC as well as an individual. Misleading or deceptive conduct can also be dealt with by the state vide chapter 4 of the ACL.
The Australian Consumer Law (ACL) defines an act as 'unconscionable' if one of the parties to a transaction has a 'special disability'. It mandates the other party to be aware of such disability and should not act in a way that makes it unfairly difficult for the weaker party.
The common law is referred to as "the unwritten law" - section 20 of CCA deals with that.
Section 21 of ACL prohibits unconsionability in consumer transactions whereas, section 22 provides the factors that "indicate unconsionability".
The Australian Consumer Law provides certain guarantees to consumers (earlier known as warranties). This also applies to the State sale of goods acts. According to this law, consumers and goods have different legal jurisdictions and are hence interpreted differently. The Australian Trade Practices Act mandates the provision of warranty. Section 53, which was earlier section 69 of the TPA deals with factor. Other sections that deal with this condition are section 55 of the TPA (earlier section 71), section 56 and 57, section 54 of ACL (earlier section 66), All these provisions are only applicable to goods or services that are supplied during trade or commerce. The ACL (Australian Consumer Law) is considered to have been breached if consumers are not provided with an acceptable level of quality and are defective or broken or do not perform the intended function.
The Dawson report, released in Jan 2003, reviews the competition provisions of the Trade Practices Act.
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