The bill amends the Competition and Consumer Act 2010 to prohibit corporations with substantial market power from charging excessive prices for goods or services, commonly known as price gouging, and to empower the Australian Competition and Consumer Commission (ACCC) to enforce penalties.
The Competition and Consumer Amendment (Make Price Gouging Illegal) Bill 2024 inserts new subsections 46(2)–(2D) into the Competition and Consumer Act 2010:
Breaching corporations face existing civil penalties under section 76, with a maximum of $50 million or up to three times the benefit obtained or 30% of adjusted turnover, and the ACCC may seek enforceable undertakings under section 87B (including price-reduction orders). The amendments commence the day after Royal Assent or automatically after four months if not otherwise commenced.
By outlawing excessive pricing by dominant firms, the bill directly addresses one of the key drivers of the current cost-of-living crisis. Economic authorities from the Reserve Bank to the OECD have identified corporate price gouging as exacerbating and prolonging inflationary pressures on essential goods and services.
Ensuring prices reflect competitive benchmarks will return wealth to consumers—particularly lower-income households—and support the realisation of the right to an adequate standard of living under international law. The risk of significant civil penalties and enforceable undertakings under the ACCC’s powers will deter exploitative behaviour and encourage firms to compete on efficiency rather than unjustified mark-ups [Judgment].
While price gouging is undesirable in principle, the bill duplicates existing prohibitions on misuse of market power under section 46 and risks creating overlapping and ambiguous legal standards. The determination of what constitutes an “excessive” price may vary greatly between industries, leading to costly litigation and regulatory uncertainty for businesses.
Imposing severe penalties and open-ended undertakings may discourage firms from investing in new capacity or maintaining supply reliability—particularly in volatile markets. These compliance costs are ultimately likely to be passed on to consumers in the form of higher base prices or reduced service availability [Judgment].
2024-09-16
Senate
Before Senate
MCKIM, Sen Nick
Unspecified
Competition Policy, Consumer Protection