COMPETITION AND CONSUMER LEGISLATION AMENDMENT BILL 2011

i Competition and Consumer Legislation Amendment Bill 2011 No. , 2011

Contents

1 Short

title

...........................................................................................

2 Commencement

.................................................................................

3 Schedule(s)

........................................................................................

Schedule 1--Mergers and acquisitions

Competition and Consumer Act 2010

Schedule 2--Unconscionable conduct

Australian Securities and Investments Commission Act 2001

Competition and Consumer Act 2010

Schedule 3--Technical amendments

Trade Practices Amendment (Australian Consumer Law) Act (No. 2)

2010

Competition and Consumer Legislation Amendment Bill 2011 No. , 2011 1

A Bill for an Act to amend the law relating to

competition and consumers, and for related

purposes

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Competition and Consumer

Legislation Amendment Act 2011.

2 Commencement

(1) Each provision of this Act specified in column 1 of the table

commences, or is taken to have commenced, in accordance with

column 2 of the table. Any other statement in column 2 has effect

according to its terms.

2 Competition and Consumer Legislation Amendment Bill 2011 No. , 2011

Commencement information

Column 1

Column 2

Column 3

Provision(s)

Commencement

Date/Details

1. Sections 1 to 3

and anything in

this Act not

elsewhere covered

by this table

The day this Act receives the Royal Assent.

2. Schedule 1

A single day to be fixed by Proclamation.

However, if the provision(s) do not

commence within the period of 2 months

beginning on the day this Act receives the

Royal Assent, they commence on the day

after the end of that period.

3. Schedule 2

The later of:

(a) the day this Act receives the Royal

Assent; and

(b) 1 January 2012.

4. Schedule 3

Immediately after the commencement of

Schedule 5 to the Trade Practices

Amendment (Australian Consumer Law) Act

(No. 2) 2010.

1 January 2011

Note:

This table relates only to the provisions of this Act as originally

enacted. It will not be amended to deal with any later amendments of

this Act.

(2) Any information in column 3 of the table is not part of this Act.

Information may be inserted in this column, or information in it

may be edited, in any published version of this Act.

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.

Mergers and acquisitions Schedule 1

Competition and Consumer Legislation Amendment Bill 2011 No. , 2011 3

Schedule 1--Mergers and acquisitions

Competition and Consumer Act 2010

1 Subsections 50(1) and (2)

Omit "a market", substitute "any market".

2 Subsection 50(6) (definition of market)

Omit "substantial".

3 At the end of Part XIII

Add:

Division 2--Application of amendments made by the

Competition and Consumer Legislation

Amendment Act 2011

179 Amendments of section 50

The amendments of section 50 made by Schedule 1 to the

Competition and Consumer Legislation Amendment Act 2011

apply to acquisitions occurring after the commencement of that

Schedule.

4 Subsection 50(1) of Schedule 1

Omit "a market", substitute "any market".

5 Subsection 50(6) of Schedule 1 (definition of market)

Omit "substantial".

Schedule 2 Unconscionable conduct

4 Competition and Consumer Legislation Amendment Bill 2011 No. , 2011

Schedule 2--Unconscionable conduct

Australian Securities and Investments Commission Act 2001

1 Sections 12CB and 12CC

Repeal the sections, substitute:

12CB Unconscionable conduct in connection with financial services

(1) A person must not, in trade or commerce, in connection with:

(a) the supply or possible supply of financial services to a person

(other than a listed public company); or

(b) the acquisition or possible acquisition of financial services

from a person (other than a listed public company);

engage in conduct that is, in all the circumstances, unconscionable.

(2) This section does not apply to conduct that is engaged in only

because the person engaging in the conduct:

(a) institutes legal proceedings in relation to the supply or

possible supply, or in relation to the acquisition or possible

acquisition; or

(b) refers to arbitration a dispute or claim in relation to the

supply or possible supply, or in relation to the acquisition or

possible acquisition.

(3) For the purpose of determining whether a person has contravened

subsection (1):

(a) the court must not have regard to any circumstances that

were not reasonably foreseeable at the time of the alleged

contravention; and

(b) the court may have regard to conduct engaged in, or

circumstances existing, before the commencement of this

section.

(4) It is the intention of the Parliament that:

(a) this section is not limited by the unwritten law of the States

and Territories relating to unconscionable conduct; and

(b) this section is capable of applying to a system of conduct or

pattern of behaviour, whether or not a particular individual is

Unconscionable conduct Schedule 2

Competition and Consumer Legislation Amendment Bill 2011 No. , 2011 5

identified as having been disadvantaged by the conduct or

behaviour; and

unconscionable, a court's consideration of the contract may

include consideration of:

(i) the terms of the contract; and

(ii) the manner in which and the extent to which the

contract is carried out;

and is not limited to consideration of the circumstances

relating to formation of the contract.

(5) In this section:

listed public company has the same meaning as it has in the

Income Tax Assessment Act 1997.

12CC Matters the court may have regard to for the purposes of

section 12CB

(1) Without limiting the matters to which the court may have regard

for the purpose of determining whether a person (the supplier) has

contravened section 12CB in connection with the supply or

possible supply of financial services to a person (the service

recipient), the court may have regard to:

(a) the relative strengths of the bargaining positions of the

supplier and the service recipient; and

(b) whether, as a result of conduct engaged in by the supplier, the

service recipient was required to comply with conditions that

were not reasonably necessary for the protection of the

legitimate interests of the supplier; and

documents relating to the supply or possible supply of the

financial services; and

(d) whether any undue influence or pressure was exerted on, or

any unfair tactics were used against, the service recipient or a

person acting on behalf of the service recipient by the

supplier or a person acting on behalf of the supplier in

relation to the supply or possible supply of the financial

services; and

(e) the amount for which, and the circumstances under which,

the service recipient could have acquired identical or

Schedule 2 Unconscionable conduct

6 Competition and Consumer Legislation Amendment Bill 2011 No. , 2011

equivalent financial services from a person other than the

supplier; and

(f) the extent to which the supplier's conduct towards the service

recipient was consistent with the supplier's conduct in similar

transactions between the supplier and other like service

recipients; and

(g) if the supplier is a corporation--the requirements of any

applicable industry code (see subsection (3)); and

(h) the requirements of any other industry code (see

subsection (3)), if the service recipient acted on the

reasonable belief that the supplier would comply with that

code; and

(i) the extent to which the supplier unreasonably failed to

disclose to the service recipient:

(i) any intended conduct of the supplier that might affect

the interests of the service recipient; and

(ii) any risks to the service recipient arising from the

supplier's intended conduct (being risks that the

supplier should have foreseen would not be apparent to

the service recipient); and

(j) if there is a contract between the supplier and the service

recipient for the supply of the financial services:

(i) the extent to which the supplier was willing to negotiate

the terms and conditions of the contract with the service

recipient; and

(ii) the terms and conditions of the contract; and

(iii) the conduct of the supplier and the service recipient in

complying with the terms and conditions of the contract;

and

(iv) any conduct that the supplier or the service recipient

engaged in, in connection with their commercial

relationship, after they entered into the contract; and

(k) without limiting paragraph (j), whether the supplier has a

contractual right to vary unilaterally a term or condition of a

contract between the supplier and the service recipient for the

supply of the financial services; and

(l) the extent to which the supplier and the service recipient

acted in good faith.

Unconscionable conduct Schedule 2

Competition and Consumer Legislation Amendment Bill 2011 No. , 2011 7

(2) Without limiting the matters to which the court may have regard

for the purpose of determining whether a person (the acquirer) has

contravened section 12CB in connection with the acquisition or

possible acquisition of financial services from a person (the

supplier), the court may have regard to:

(a) the relative strengths of the bargaining positions of the

acquirer and the supplier; and

(b) whether, as a result of conduct engaged in by the acquirer,

the supplier was required to comply with conditions that were

not reasonably necessary for the protection of the legitimate

interests of the acquirer; and

relating to the acquisition or possible acquisition of the

financial services; and

(d) whether any undue influence or pressure was exerted on, or

any unfair tactics were used against, the supplier or a person

acting on behalf of the supplier by the acquirer or a person

acting on behalf of the acquirer in relation to the acquisition

or possible acquisition of the financial services; and

(e) the amount for which, and the circumstances in which, the

supplier could have supplied identical or equivalent financial

services to a person other than the acquirer; and

(f) the extent to which the acquirer's conduct towards the

supplier was consistent with the acquirer's conduct in similar

transactions between the acquirer and other like suppliers;

and

(g) the requirements of any applicable industry code (see

subsection (3)); and

(h) the requirements of any other industry code (see

subsection (3)), if the supplier acted on the reasonable belief

that the acquirer would comply with that code; and

(i) the extent to which the acquirer unreasonably failed to

disclose to the supplier:

(i) any intended conduct of the acquirer that might affect

the interests of the supplier; and

(ii) any risks to the supplier arising from the acquirer's

intended conduct (being risks that the acquirer should

have foreseen would not be apparent to the supplier);

and

Schedule 2 Unconscionable conduct

8 Competition and Consumer Legislation Amendment Bill 2011 No. , 2011

(j) if there is a contract between the acquirer and the supplier for

the acquisition of the financial services:

(i) the extent to which the acquirer was willing to negotiate

the terms and conditions of the contract with the

supplier; and

(ii) the terms and conditions of the contract; and

(iii) the conduct of the acquirer and the supplier in

complying with the terms and conditions of the contract;

and

(iv) any conduct that the acquirer or the supplier engaged in,

in connection with their commercial relationship, after

they entered into the contract; and

(k) without limiting paragraph (j), whether the acquirer has a

contractual right to vary unilaterally a term or condition of a

contract between the acquirer and the supplier for the

acquisition of the financial services; and

(l) the extent to which the acquirer and the supplier acted in

good faith.

(3) In this section:

applicable industry code, in relation to a corporation, has the same

meaning as it has in subsection 51ACA(1) of the Competition and

Consumer Act 2010.

industry code has the same meaning as it has in subsection

51ACA(1) of the Competition and Consumer Act 2010.

Competition and Consumer Act 2010

2 Paragraph 131(2)(a)

Omit "section 22", substitute "section 21".

3 Subsection 20(2) of Schedule 2

Omit "or 22".

4 Sections 21 and 22 of Schedule 2

Repeal the sections, substitute:

Unconscionable conduct Schedule 2

Competition and Consumer Legislation Amendment Bill 2011 No. , 2011 9

21 Unconscionable conduct in connection with goods or services

(1) A person must not, in trade or commerce, in connection with:

(a) the supply or possible supply of goods or services to a person

(other than a listed public company); or

(b) the acquisition or possible acquisition of goods or services

from a person (other than a listed public company);

engage in conduct that is, in all the circumstances, unconscionable.

(2) This section does not apply to conduct that is engaged in only

because the person engaging in the conduct:

(a) institutes legal proceedings in relation to the supply or

possible supply, or in relation to the acquisition or possible

acquisition; or

(b) refers to arbitration a dispute or claim in relation to the

supply or possible supply, or in relation to the acquisition or

possible acquisition.

(3) For the purpose of determining whether a person has contravened

subsection (1):

(a) the court must not have regard to any circumstances that

were not reasonably foreseeable at the time of the alleged

contravention; and

(b) the court may have regard to conduct engaged in, or

circumstances existing, before the commencement of this

section.

(4) It is the intention of the Parliament that:

(a) this section is not limited by the unwritten law relating to

unconscionable conduct; and

(b) this section is capable of applying to a system of conduct or

pattern of behaviour, whether or not a particular individual is

identified as having been disadvantaged by the conduct or

behaviour; and

unconscionable, a court's consideration of the contract may

include consideration of:

(i) the terms of the contract; and

(ii) the manner in which and the extent to which the

contract is carried out;

Schedule 2 Unconscionable conduct

10 Competition and Consumer Legislation Amendment Bill 2011 No. , 2011

and is not limited to consideration of the circumstances

relating to formation of the contract.

22 Matters the court may have regard to for the purposes of

section 21

(1) Without limiting the matters to which the court may have regard

for the purpose of determining whether a person (the supplier) has

contravened section 21 in connection with the supply or possible

supply of goods or services to a person (the customer), the court

may have regard to:

(a) the relative strengths of the bargaining positions of the

supplier and the customer; and

(b) whether, as a result of conduct engaged in by the supplier, the

customer was required to comply with conditions that were

not reasonably necessary for the protection of the legitimate

interests of the supplier; and

relating to the supply or possible supply of the goods or

services; and

(d) whether any undue influence or pressure was exerted on, or

any unfair tactics were used against, the customer or a person

acting on behalf of the customer by the supplier or a person

acting on behalf of the supplier in relation to the supply or

possible supply of the goods or services; and

(e) the amount for which, and the circumstances under which,

the customer could have acquired identical or equivalent

goods or services from a person other than the supplier; and

(f) the extent to which the supplier's conduct towards the

customer was consistent with the supplier's conduct in

similar transactions between the supplier and other like

customers; and

(g) the requirements of any applicable industry code; and

(h) the requirements of any other industry code, if the customer

acted on the reasonable belief that the supplier would comply

with that code; and

(i) the extent to which the supplier unreasonably failed to

disclose to the customer:

(i) any intended conduct of the supplier that might affect

the interests of the customer; and

Unconscionable conduct Schedule 2

Competition and Consumer Legislation Amendment Bill 2011 No. , 2011 11

(ii) any risks to the customer arising from the supplier's

intended conduct (being risks that the supplier should

have foreseen would not be apparent to the customer);

and

(j) if there is a contract between the supplier and the customer

for the supply of the goods or services:

(i) the extent to which the supplier was willing to negotiate

the terms and conditions of the contract with the

customer; and

(ii) the terms and conditions of the contract; and

(iii) the conduct of the supplier and the customer in

complying with the terms and conditions of the contract;

and

(iv) any conduct that the supplier or the customer engaged

in, in connection with their commercial relationship,

after they entered into the contract; and

(k) without limiting paragraph (j), whether the supplier has a

contractual right to vary unilaterally a term or condition of a

contract between the supplier and the customer for the supply

of the goods or services; and

(l) the extent to which the supplier and the customer acted in

good faith.

(2) Without limiting the matters to which the court may have regard

for the purpose of determining whether a person (the acquirer) has

contravened section 21 in connection with the acquisition or

possible acquisition of goods or services from a person (the

supplier), the court may have regard to:

(a) the relative strengths of the bargaining positions of the

acquirer and the supplier; and

(b) whether, as a result of conduct engaged in by the acquirer,

the supplier was required to comply with conditions that were

not reasonably necessary for the protection of the legitimate

interests of the acquirer; and

relating to the acquisition or possible acquisition of the goods

or services; and

(d) whether any undue influence or pressure was exerted on, or

any unfair tactics were used against, the supplier or a person

acting on behalf of the supplier by the acquirer or a person

Schedule 2 Unconscionable conduct

12 Competition and Consumer Legislation Amendment Bill 2011 No. , 2011

acting on behalf of the acquirer in relation to the acquisition

or possible acquisition of the goods or services; and

(e) the amount for which, and the circumstances in which, the

supplier could have supplied identical or equivalent goods or

services to a person other than the acquirer; and

(f) the extent to which the acquirer's conduct towards the

supplier was consistent with the acquirer's conduct in similar

transactions between the acquirer and other like suppliers;

and

(g) the requirements of any applicable industry code; and

(h) the requirements of any other industry code, if the supplier

acted on the reasonable belief that the acquirer would comply

with that code; and

(i) the extent to which the acquirer unreasonably failed to

disclose to the supplier:

(i) any intended conduct of the acquirer that might affect

the interests of the supplier; and

(ii) any risks to the supplier arising from the acquirer's

intended conduct (being risks that the acquirer should

have foreseen would not be apparent to the supplier);

and

(j) if there is a contract between the acquirer and the supplier for

the acquisition of the goods or services:

(i) the extent to which the acquirer was willing to negotiate

the terms and conditions of the contract with the

supplier; and

(ii) the terms and conditions of the contract; and

(iii) the conduct of the acquirer and the supplier in

complying with the terms and conditions of the contract;

and

(iv) any conduct that the acquirer or the supplier engaged in,

in connection with their commercial relationship, after

they entered into the contract; and

(k) without limiting paragraph (j), whether the acquirer has a

contractual right to vary unilaterally a term or condition of a

contract between the acquirer and the supplier for the

acquisition of the goods or services; and

(l) the extent to which the acquirer and the supplier acted in

good faith.

Schedule 3 Technical amendments

14 Competition and Consumer Legislation Amendment Bill 2011 No. , 2011

Schedule 3--Technical amendments

Trade Practices Amendment (Australian Consumer Law) Act

(No. 2) 2010

1 Item 36 of Schedule 5

Omit "1A and 1AA", substitute "1AAA, 1AA and 1A".

2 Item 50 of Schedule 5

Omit "or of the Australian Consumer Law".

3 Item 54 of Schedule 5 (note)

Omit "or Australian Consumer Law".

4 Item 65 of Schedule 5

Omit ", or a provision of the Australian Consumer Law,".

5 Item 71 of Schedule 5

Omit ", or of the Australian Consumer Law,".

6 Item 74 of Schedule 5

Omit "or 6(1)".

7 Item 90 of Schedule 5

Omit "Part IV, IVA, IVB, V or VC or of the Australian Consumer

Law", substitute ", IVA, IVB, V or VC, or of the Australian Consumer

Law,".

8 Item 90 of Schedule 5

Omit "Division 2", substitute "or Division 2".

9 Item 96 of Schedule 5

Omit "or a", substitute ", or of a".

Commonwealth of Australia Bills

COMPETITION AND CONSUMER LEGISLATION AMENDMENT BILL 2011