House of Representatives

Explanatory Memorandum

Circulated By the Authority of the Assistant Treasurer and Minister for Competition Policy and Consumer Affairs, the Hon Chris Bowen Mp

Chapter 8 - Minor and technical amendments

Outline of chapter

8.1 This chapter outlines provisions in the Bill that are not directly related to the proposal to implement criminal sanctions for serious cartel conduct and to provide parallel civil sanctions. Nonetheless, the amendments discussed in this chapter facilitate more effective investigation and enforcement provisions in the Trade Practices Act 1974 ('the TP Act').

Context of amendments

8.2 The Bill includes a number of minor or technical amendments to various provisions of Part IV and related provisions.

Summary of new law

8.3 The amendments referred to in this chapter:

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correct references in the TP Act to provisions in the Crimes Act 1914 ;

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amend existing provisions of the TP Act to insert references to section 86E;

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amend inconsistencies that arise in relation to the information-gathering powers of the Australian Competition and Consumer Commission ('the ACCC');

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provide for the inspection, and copying, of documents contained in registers established by the Trade Practices Legislation Amendment Act (No. 1) 2006 ('the Dawson Act'); and

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make minor amendments to Part XIB (The telecommunications industry) of the TP Act insofar as those provisions interface with Part IV of the TP Act.

Comparison of key features of new law and current law

Detailed explanation of new law

Enforcement and recovery of fines

8.4 In addition to the amendments to current section 79A referred to in Chapter 2 (which applies the power to enforce and recover certain fines imposed), an amendment to current subsection 79A(5) removes a reference to section 18A of the Crimes Act and substitutes with a reference to section 15A of the Crimes Act. [Schedule 2, item 1, subsection 79A(5)]

References to section 86E inserted into other provisions

8.5 Current section 86E enables the Court to make an order disqualifying a person from managing a corporation if certain pre-conditions are met. The section was inserted into the TP Act by the Dawson Act in 2006. Two provisions of the TP Act are amended to insert references to section 86E. The two amendments discussed below are in addition to the amendments made to sections 83 and 87 discussed in Chapter 6: Remedies.

Findings made in earlier proceedings can be evidence in later proceedings

8.6 Current section 83 provides that findings of fact made against a person in earlier proceedings under sections 77, 80, 81, 86C or 86D are prima facie evidence of those facts in later proceedings under Part IV, IVA, IVB, V or VC. An amendment adds section 86E as a section under which findings of fact can be made in earlier proceedings. Therefore, in proceedings to seek a disqualification order under section 86E, a finding against a person is prima facie evidence of a contravention of Parts IV, IVA, IVB, V or VC. [Schedule 2, item 3, section 83]

Remedial orders

8.7 Current subsection 87(1) confers broad powers on the Court to make remedial orders, in addition to other orders that it may make under section 82 (Actions for damages), 86C (Non-punitive orders) or 86D (Punitive orders - adverse publicity). An amendment adds section 86E to this list. The effect is that the Court can make remedial orders, in addition to its power to disqualify a person from managing a corporation. [Schedule 2, item 6, subsection 87(1)]

Amendments to ACCC's information-gathering powers

8.8 In addition to the search and seizure provisions in Part XID (introduced by the Dawson Act), the ACCC has the power to require the production of documents, furnishing of information or giving of evidence under current section 155 of the TP Act. Subsection 155(5) makes it an offence to fail to comply with a section 155 notice issued by the ACCC. Various anomalies arise in relation to section 155, and amendments address these anomalies.

Privilege against self incrimination for individuals

8.9 Current paragraph 155(7)(a) provides that information obtained under a section 155 notice cannot be used in criminal proceedings against individuals other than proceedings for non-compliance with section 155.

8.10 Information obtained under section 155 cannot be used in similar proceedings against individuals under the Criminal Code.

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Documents obtained under section 155 can be used in criminal proceedings against an individual for an offence under subsection 155(5), such as giving false or misleading evidence, but cannot be used in similar proceedings against the individual under the Criminal Code, such as providing false or misleading documents under subsection 137.2.

8.11 The provision is amended to prevent answers given (but not documents produced) by an individual under subsection 155(1) of the TP Act from being used in evidence against the individual in any criminal proceeding other than proceedings for an offence under section 155 or sections 137.1 (false or misleading information), 137.2 (false or misleading documents) or 149.1 (obstructions of Commonwealth public official) of the Criminal Code that relates to the information provided under subsection 155(1). [Schedule 2, items 44 to 47, subsection 155(7)]

8.12 Current subsection 159(2) also provides that evidence given by a person before the ACCC is not admissible against him or her in any criminal proceedings other than proceedings for offences against Part XII. Amendments repeal current subsection 159(2) and insert a subsection that provides that evidence given by an individual before the ACCC is not admissible against the individual in any criminal proceedings other than for an offence against Part XII or sections 137.1 (false or misleading information), 137.2 (false or misleading documents) or 149.1 (obstructions of Commonwealth public official) of the Criminal Code. [Schedule 2, item 49, subsection 159(2)]

Privilege against self incrimination or exposure to a penalty

8.13 Subsection 155(7) presently abrogates the privilege against self incrimination for persons required to provide information, documents or evidence pursuant to a notice issued under subsection 155(1). The proposed changes to subsection 155(7) abrogate both the privilege against self incrimination and the privilege against exposure to a penalty for individuals required to furnish information, produce information or give evidence under subsection 155(1). [Schedule 2, items 43 to 46, subsection 155(7)]

8.14 A similar amendment is made to subsection 159(1). Presently, that subsection provides that a person appearing before the ACCC to give evidence or produce documents is not excused from answering a question, or producing a document, on the ground that the answer to the question, or the document, may tend to incriminate them. The amendment will extend subsection 159(1) so that it also abrogates the privilege against exposure to a penalty in the same circumstances. [Schedule 2, item 48, subsection 159(1)]

8.15 These amendments align current sections 155 and 159 with Commonwealth policy relating to other corporate enforcement agencies (such as the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority), and with current section 154R in the TP Act (answering of questions or producing evidential material).

Use of evidentiary material obtained from a corporation

8.16 Under current paragraph 155(7)(b), information obtained under a section 155 notice cannot be used in criminal proceedings against corporations other than proceedings under the TP Act and certain proceedings under the Radiocommunications Act 1992 .

8.17 However, case law and section 187 of the Evidence Act 1995 abolish the privilege against self incrimination and the imposition of a penalty for corporations.

8.18 Existing paragraph 155(7)(b) would prohibit information obtained under section 155 from being used in proceedings under the Criminal Code, whereas under the common law and section 187 of the Evidence Act, the information can be used in such proceedings. Amendments to subsection 155(7) align that provision with the common law and the Evidence Act, so that any evidentiary material obtained from a corporation under subsection 155(1) can be used against the corporation in any proceeding. [Schedule 2, item 47, subsection 155(7)]

Inspection, and copying, of documents contained in merger registers

8.19 Current section 165 regulates the inspection and copying of documents that are required to be kept under other provisions of the TP Act. Paragraph 165(1)(a) provides that a person may apply to inspect any document contained in a register that is kept pursuant to subsection 89(3) or 95(1). However, section 165 does not include references to the registers that are required to be kept under sections 95AH and 95AZ (both of which were inserted by the Dawson Act), nor is the inspection of these registers otherwise provided for under the TP Act.

8.20 Amendments will permit a person, on application in accordance with regulations and on payment of the prescribed fee to inspect documents in the merger authorisation register kept by the ACCC under section 95AH. [Schedule 2, item 50, paragraph 165(1)(a)]

8.21 Amendments will also permit a person, on application in accordance with regulations and on payment of the prescribed fee to inspect documents in the merger authorisation register kept by the Australian Competition Tribunal under section 95AZ, and to obtain a copy of such a document. [Schedule 2, item 51, subsection 165(3A)]

Amendments to Part XIB - The telecommunications industry

8.22 Current subsection 151AJ(3) provides that a carrier or carriage service provider engages in anticompetitive conduct if the carrier or carriage service provider engages in conduct that breaches particular provisions of Part IV of the TP Act, and the conduct relates to a telecommunications market.

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The particular provisions of Part IV are section 45 (contracts, arrangements or understandings that restrict dealings or affect competition), 45B (Covenants affecting competition), 46 (Misuse of market power), 47 (Exclusive dealing) and 48 (Resale price maintenance).

8.23 Current subsection 151AJ(4) provides that, for the purposes of applying that provision to a carrier or carriage service provider that is not a corporation to determine whether a contravention of those provisions occurred, it is to be assumed that each reference to a corporation included a reference to a carrier or carriage service provider that is not a corporation.

8.24 Amendments provide that it is assumed when determining the application of subsection 151AJ(3) that subsections 45(8) and 47(12) had not been enacted.

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Subsection 45(8) and 47(12) limit the operation of sections 45 and 47 in certain circumstances involving bodies corporate which are related to each other.

8.25 This will ensure that a carrier, or a carriage service provider, that is not a corporation, cannot rely on subsections 45(8) and 47(12).

8.26 Amendments to section 151AJ(7) also provide that a carrier or carriage service provider does not engage in anticompetitive conduct if that conduct does not constitute a contravention of section 45 or 45B because of the operation of subsection 45(9) or 45B(8). This ensures that a carrier or carriage service provider does not act anticompetitively in certain circumstances where they have made an application to the ACCC for an authorisation with respect to certain conduct. [Schedule 1, items 105, 107 and 109, subsection 151AJ(7)]

Application and transitional provisions

8.27 Application provisions clarify that amendments to subsection 155(7) of the TP Act apply to notices under section 155 served after the commencement of the application provision. [Schedule 2, item 53]

8.28 Further, amendments to section 159 of the TP Act apply to requirements to give evidence and produce documents imposed after the commencement of the application provision. [Schedule 2, item 53]

Consequential amendments

8.29 Subsection 79A(10) of the TP Act is repealed, as it refers to section 18A of the Crimes Act. [Schedule 2, item 2, subsection 79A(10)]