The Government today introduced the Trade Practices Amendment (Small Business Protection) Bill to amend section 87 of the Trade Practices Act 1974 (the Act).
Currently, section 87 of the Act allows the Australian Competition and Consumer Commission (ACCC) to bring representative actions in relation to all forms of restrictive trade practices prohibited by the Act except for the secondary boycott provisions in sections 45D and 45E. The Government’s amendments will empower the ACCC to bring representative court actions for breaches of the secondary boycott provisions, in appropriate circumstances.
A secondary boycott involves action by two or more people acting in concert, which prevents a third party, such as a potential customer or supplier, from dealing with or doing business with the target. The innocent third party, who has nothing to do with the dispute which is the subject of the direct boycott, suffers loss or damage as a result of the boycott.
Sections 45D and 45E of the Trade Practices Act deal with two types of illegal secondary boycotts.
Section 45D prohibits two persons from acting in concert to hinder or prevent a third person from supplying or acquiring goods or services from the target of the boycott, where the purpose or likely effect of the conduct is to cause substantial loss or damage to the business of the target.
Section 45E prohibits a person from making an agreement with a trade union for the purpose of preventing or hindering the supply or acquisition of goods or services between that person and the target of the boycott.
Secondary boycotts can have a significant impact on our economy. They disrupt trade, they reduce output and they inhibit competition. It is important that we provide a strong disincentive for those people who would target, intimidate and bully small business by applying a secondary boycott to that business.
At present, the ACCC is able to investigate and prosecute unlawful secondary boycotts under sections 45D and 45E, but it cannot bring representative actions. That is, the ACCC cannot seek compensation for damages on behalf for parties affected by a contravention of the provisions.
Under the Government’s Bill, if the ACCC is successful in a representative action on behalf of businesses who are the targets of a secondary boycott, the targets will be able to obtain compensation the Court thinks appropriate, including damages.
For over 10 years, the Coalition Government has committed itself to implementing reforms which provide fairer outcomes for small business. This commitment is in recognition of not only the significant contribution small business makes to our economy, but also of the fact that the nearly two million Australian small businesses often lack the power and resources to take action when they experience unfair treatment. This is particularly so in relation to illegal secondary boycotts, as small businesses operating on tight margins and with limited cash flows find it difficult to bear both the cost of the secondary boycott and the burden of initiating legal proceedings.
As a result of the Bill, those who would inflict economic damage on small Australian businesses under s 45D and 45E of the Act will no longer be able to do this with impunity. Instead, they will be held to account for the economic damage that they cause as the ACCC will, for the first time, be able to bring a representative action on behalf of those small businesses.
The Coalition Government reaffirms its commitment to stand up for small business against thuggery and intimidation. It is vital, both for our economy and our way of life.
These amendments will achieve greater consistency in the administration of the Trade Practices Act and provide Australian small businesses with greater protection from unlawful secondary boycott conduct.