Frequently Asked Questions
You need to check the relevant legislation in your State and Territory, as the rules are different in each jurisdiction.
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If I am conducting business outside Australia am I bound by the competition provisions in the Competition and Consumer Act 2010 (Cth)?
- The Competition and Consumer Act 2010 (Cth) will apply to conduct outside Australia if you are an Australian citizen or someone who ordinarily resides in Australia.
- A company that was incorporated in Australia or that conducts business in Australia needs to make sure that any conduct it engages in outside Australia complies with the legislation.
- If you need more specific information about whether the legislation applies in your situation you can use our free and anonymous Ask a Lawyer service.
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Do companies that are incorporated in a foreign country and conduct business activities in Australia have to comply with the Competition and Consumer Act 2010 (Cth)?
- A non-Australian company can be considered to be doing business in Australia through a subsidiary. In this situation they must comply with the Competition and Consumer Act 2010 (Cth) where:
- the company communicates (including phone calls and emails) from abroad with its subsidiary in Australia; and
- the parent company controls or directs the way in which the Australian subsidiary carries out the agreement.
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Can you provide me with some guidelines on how I can set my prices in compliance with the competition provisions in the Competition and Consumer Act 2010 (Cth)?
- Discounts, rebates and credit are important elements of pricing to keep in mind when setting prices.
- You should set prices independently and not discuss or agree on what prices to set with any competitors. This may constitute price fixing.
- Only publicly available information should be used to find out about your competitor’s prices.
- Do not agree to any requests by another business to jointly fix prices or restrict business activities. This could be considered price fixing, market sharing or a collective boycott.
- You may be regarded as engaging in unconscionable conduct if you set unusually high prices on a buyer or seller who is in a considerably weaker position than you.
- If a purchaser will be reselling the goods and services you supplied you can recommend a retail price but you cannot impose a minimum price on the re-sale. This is referred to as resale price maintenance and is prohibited by the Competition and Consumer Act 2010 (Cth).
- You could be misusing your market power by engaging in predatory pricing if you consistently price your goods and services below cost to drive out other businesses in the market.
- You need to avoid making your prices conditional on the buyer conducting business with a specified third party. This behaviour risks breaching the prohibition on third line forcing.
- You can use our Phone a Lawyer service for a preliminary legal consultation if you think you may need legal advice.
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What advice can I give my salespeople to avoid breaching the competition provisions in the Competition and Consumer Act 2010 (Cth)?
- Avoid consistently pricing below cost or trying to block all the key sources of supply as this may be considered a misuse of market power.
- Do not offer to sell goods or services on the condition that the customer also purchases goods and services from another business as this may be third line forcing.
- If you get together with a competitor to put pressure on another business to do what you want you will be engaging in collective boycotting.
- You can avoid anti-competitive conduct by refusing to make agreements with your competitors about prices or sharing the market in a particular way.
- It is also worth mentioning that salespeople should not mislead or misrepresent the business’s product or services through sales pitches or marketing campaigns. Conduct that is misleading and deceptive or likely to mislead or deceive is prohibited under the Competition and Consumer Act 2010 (Cth).
- You could use our Fixed Fee Quote service to call for tenders from lawyers to help you draft guidelines for your salespeople.
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