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Predatory Pricing
The federal government has announced changes to predatory pricing laws that will clarify the laws and make prosecution by the Australian Consumer and Competition Commission and individual businesses easier.
Predatory pricing occurs when a business with large market power prices in such a way to specifically drive smaller businesses out of business. How this is defined in legislation is a technical matter. The need is to strike a careful balance so that genuine price discounting which aids free-market operations can be distinguished from pricing that damages competitive markets. The government has released correspondence from the ACCC which explains the reasoning for the legislative changes and the resetting of the balance.
Other changes include:
- Improving the ACCC's information-gathering powers.
- Improving the capacity to investigate unconscionable conduct.
- Enabling small businesses to take action in the cheaper Magistrates Court (instead of the costly Federal Court) for predatory pricing matters.
The changes should be passed by 1 August 2008. (Click here for a recent article from The Australian.)
Comment
Even though these changes are unlikely to have a direct impact on most independent contractors, they give an indication of the government's approach to small business regulation.
ICA is keen to see the government move in the direction of facilitating better contract dispute resolution through enhancing small claims-type processes.
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