The need to address regulatory and practical impediments to private enforcement in Australia was recognised in the recent Competition Policy Review (referred to as the Harper Review). Key reforms advocated by the Harper Review which ought to encourage private enforcement in Australia include the following:
1. Allow the use of admissions in a prior proceeding as prima facie evidence in private enforcement
Recent successes in significant private competition law cases in Australia have ridden on the coattails of prosecutions by the ACCC. Whilst the CCA allows a finding of fact by a Court in a prior proceeding to be used as prima facie evidence of that fact in a subsequent private enforcement proceeding (s 83 of the CCA), the utility of this provision may be undermined in circumstances where the ACCC’s prosecution is resolved with the respondents. The Harper Review noted that there is uncertainty as to whether a private litigant can rely on s 83 of the CCA in relation to facts which have been admitted in a prior proceeding.
The Review has recommended that s 83 of the CCA be amended to expressly extend to admissions of fact made by a person in a prior proceeding. If implemented, this should encourage more private actions to follow on from ACCC proceedings.
2. Substantive changes to misuse of market power prohibition
The Harper Review found that the Australian law regarding misuse of market power is currently “deficient” and “out of step with international approaches”. The Review recommended that it be amended to abolish the “purpose” and “taking advantage of power” tests and, instead, to prohibit a company which has substantial market power from engaging in any conduct where the purpose or the likely effect is to substantially lessen competition in any market.
Such amendments would overcome the perceived difficulties associated with establishing a misuse of market power.
3. Allow private enforcement against overseas corporations without Australian Government consent
Currently, before conduct outside of Australia can be relied upon in a private enforcement proceeding, written consent must be obtained from a Minister in the Australian Government (s5 of the CCA). Consent can be refused for reasons including that, in the opinion of the Minister, it is not in Australia’s national interest to grant the consent.
The Harper Review described this requirement as “an unnecessary roadblock” and has recommended its removal.
4. Promote greater access to support services for small business
The Harper Review found that small businesses face significant difficulties when endeavouring to engage in private enforcement actions.
In an effort to help address those difficulties, the Harper Review has recommended that where the ACCC decides not to take enforcement action in relation to a complaint by a small business, it should direct the parties to alternative dispute resolution.
On a global heat-map of private competition law enforcement, Australia may be represented as amber. Compared with the applicable regimes in red-hot jurisdictions such as the United States, there are some perceived impediments for private plaintiffs in this arena. However, proposed reforms are likely to generate energy and we expect to see meaningful growth in private competition law enforcement as a consequence.