On 18 September 2007, the Senate passed amendments to section 46 of the Trade Practices Act 1974 (Cth). The most significant and most controversial element of the amendments - a new section 46(1AA) prohibiting anti-competitive below-cost pricing - was added at the last minute. The application of the new prohibition is clouded by uncertainty and potentially has significant implications for some businesses.
Background
The existing predatory pricing provision in section 46 prohibited corporations with a substantial degree of power in a market from taking advantage of that power for a proscribed anti-competitive purpose.
Concerns had been raised about the effectiveness of section 46 in addressing predatory pricing and the uncertainty surrounding the court's interpretation of its application. In response, the original bill introduced by the Government had proposed a number of amendments to section 46 of the Act to:
