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ARTICLE · 19 FEBRUARY 2008

Australian Competition Regulator Comments On New Predatory Pricing Prohibition: Trade Practices Act 1974 (s 461AA)

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With effect from 25 September 2007 the Australian Trade Practices Act was amended, among other matters, to include, in the context of the prohibition on misuse of market power, a specific provision prohibiting predatory pricing.

AustraliaAntitrust/Competition Law
Graham Maher
Graham Maher

Background

With effect from 25 September 2007 the Australian Trade Practices Act was amended, among other matters, to include, in the context of the prohibition on misuse of market power, a specific provision prohibiting predatory pricing. The expressed purpose of the new provision is to "specifically target(ing) anticompetitive below-cost pricing by corporations with a substantial market share"1

The new predatory pricing provision prohibits a corporation possessing "substantial market share" from discounting below its "relevant cost" for a sustained period" for the purpose, among others, of eliminating or substantially damaging a competitor.

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