The Competition and Consumer Amendment (Divestiture Powers) Bill 2024 amends the Competition and Consumer Act 2010 to give courts new authority to order corporations that misuse substantial market power to divest assets or reduce their market share.
It also allows the Australian Competition and Consumer Commission (ACCC) and parties to apply for consent-based divestiture orders even without a formal finding under section 46.
The Bill amends the Competition and Consumer Act 2010 by inserting a new section 80AD into Part VI (Enforcement and Remedies). Under section 80AD(1), where a corporation has, or is taken to have, a substantial degree of market power and has engaged in conduct that has the purpose or effect of substantially lessening competition, the Federal Court may, on application by the ACCC, issue directions to divest assets or take other measures to reduce the corporation’s market power or market share.
Section 80AD(2) limits the duration of any divestment order to actions completed within two years of the order. Section 80AD(3) requires ACCC applications to be made within three years of the contravention. Section 80AD(4) permits the Court to make divestiture orders by consent of all parties even if no breach has been formally established under section 46. Section 80AD(5) enables the Court to accept undertakings from the corporation as an alternative remedy, and section 80AD(6) clarifies that these powers do not limit any other judicial remedies under the Act. Clauses 1–3 set out the short title, commencement upon Royal Assent, and the amendment mechanism.
Introducing divestiture powers addresses harms that fines alone may not remedy by structurally restoring competition. From a utilitarian standpoint, compelling the sale of assets or reduction of market share maximises overall welfare by lowering prices, expanding consumer choice, and deterring future anti-competitive conduct.[Judgment]
Ensuring smaller firms can enter and survive in markets supports economic equality. By breaking up or rebalancing dominant positions, the Bill promotes a more level playing field, reducing concentration of wealth and power in entrenched incumbents.[Judgment]
Because orders are time-limited, subject to judicial oversight, and available only after due process or consent, the new power complements existing ACCC remedies without imposing indefinite or arbitrary constraints on corporate operations.
While intended to curb market abuse, divestiture orders risk creating legal uncertainty over the breadth of “substantial lessening of competition.” Unclear standards may chill legitimate investments, mergers and expansions as firms fear retrospective asset sales.[Judgment]
The ACCC already wields effective tools—such as injunctions, undertakings and pecuniary penalties—under existing sections of the Act. Adding a divestiture remedy may duplicate or overlap current enforcement powers without clear evidence of unmet need.
Mandating the sale of corporate assets without compensation mechanisms raises concerns about property rights and the rule of law. Corporations may see this as an excessive interference in established ownership rights, potentially deterring business activity and foreign investment.
2024-03-20
Senate
Before Senate
MCKIM, Sen Nick
Unspecified
Competition Policy, Consumer Protection