Deck 31: Restrictive trade practices

Question 1

What is the role and function of Australian Competition and Consumer Commission?

Answer 1

The role and function of the Australian Competition and Consumer Commission (ACCC) is to administer the Competition and Consumer Act 2010 (Cth). Apart from this function, the ACCC is also responsible for:
• the granting of authorisations - it gives permission to engage in a particular restrictive trade practice that would ordinarily be prohibited but which gives the public a benefit, that to the satisfaction of the commission outweighs the adverse effect on competition; and
• providing assistance to the public by engaging in research, education of the public and the business community and by providing consumer guidance.
In performing its enforcement and authorisation functions, the ACCC can enter premises to obtain evidence and can conduct public hearings. Also, the ACCC has the power to fine, order an injunction or make an order directing the sale of shares and assets acquired by a corporation in an illegal manner.

Question 2

Which of the following is NOT one of the functions of the Australian Competition and Consumer Commission?

A) Hearing appeals from decisions to grant or revoke authorisations.
B) Educating the public and the business community by providing consumer guidance.
C) Administering and enforcing the Competition and Consumer Act 2010 (Cth).
D) Authorising otherwise prohibited restrictive trade practices.

Answer 2

A

Question 3

Which of the following is NOT one of the constitutional heads of power on which the Competition and Consumer Act 2010 (Cth) is based?

A) The corporation's power.
B) The overseas trade and commerce power.
C) The trade or commerce within a territory power.
D) The trade practices power.

Answer 3

D

Question 4

How can the restrictive trade practices provisions of the Competition and Consumer Act 2010 (Cth) be reconciled with the liberal notion of a free market?

Question 5

What is the main reason for the practice of resale price maintenance?

A) Resale price maintenance is likely to increase demand for the product.
B) Resale price maintenance is an advertising ploy.
C) Discounting is perceived as anti-competitive.
D) Discounting is perceived as detrimental to the market status of the product.

Question 6

Which of the following bodies is primarily responsible for enforcing the Competition and Consumer Act 2010 (Cth)?

A) The Prices Surveillance Authority.
B) The Australian Competition and Consumer Commission.
C) The Australian Competition Tribunal.
D) The Trade Practices Commission.

Question 7

The concepts of 'market' and 'competition' are essential to the effective operation of the Competition and Consumer Act 2010 (Cth).

Question 8

Which of the following Agreements signed by the Commonwealth, State and Territory Governments established the National Competition Council?

A) The Conduct Code Agreement.
B) The Competition Principles Agreement.
C) The Agreement to Implement the National Competition Policy and Related Reforms.
D) All of the above

Question 9

One of the functions of the ACCC is to provide assistance to the public by engaging in research, education of the public and the business community and by providing consumer guidance. Visit www.accc.gov.au and list the ways in which the ACCC provides 'consumer guidance.'

Question 10

Only corporations can be liable for breaches of the Competition and Consumer Act 2010 (Cth).

Question 11

'Horizontal price fixing' is an agreement to fix, control or maintain price, made between:

A) Competing businesses at the same level of business activity.
B) Supplier and retailer.
C) Manufacturer and customer.
D) Seller and buyer.

Question 12

Describe how the concepts of market and competition are linked and important in respect to trade in Australia.

Question 13

'Vertical price fixing' includes an agreement to fix, control or maintain price, made between:

A) Competing businesses at the same level of business activity.
B) Manufacturer or wholesaler and retailer.
C) Retailer and retailer.
D) Buyers.

Question 14

The agreement in TPC v Email [1980] ATPR 40-172 was held not to be a price fixing agreement because:

A) The two manufacturers were in competition with each other.
B) The parallel pricing was due to a meeting of minds.
C) The parallel pricing was due to market forces.
D) The two manufacturers had different pricing lists.

Question 15

The Competition and Consumer Act 2010 (Cth) applies to all businesses in Australia as a result of which of the following agreements?

A) The Agreement to Implement the National Competition Policy and Related Reforms.
B) The Conduct Code Agreement.
C) The Competition Principles Agreement.
D) All of the above.

Question 16

What is the constitutional basis for the Competition and Consumer Act 2010 (Cth)?

Question 17

Which of the following statements accurately describes the function of the Australian Competition Tribunal?

A) Hearing appeals from decisions to grant or revoke authorisations.
B) Administering and enforcing the Competition and Consumer Act 2010 (Cth).
C) Educating the public and the business community by providing consumer guidance.
D) Authorising otherwise prohibited restrictive trade practices.

Question 18

In the context of the Competition and Consumer Act 2010 (Cth), which of the following statements has NOT been said about the term 'competition'?

A) Competition is a process rather than a situation.
B) Competition is a mechanism for discovery of market information.
C) Competition is a mechanism for discovery of the most successful businesses.
D) Competition includes competition from imported goods.

Question 19

Which of the following is the correct definition of the term: 'resale price maintenance'?

A) The supplier of goods recommends a price at which the retailer may sell their goods or services.
B) The retailer of goods tries to impose a minimum price below which they will not purchase the goods from the supplier.
C) The supplier of goods tries to impose a minimum price below which their goods or services are not to be sold.
D) An agreement between the supplier and retailer that the goods will not be supplied to competitors of the retailer.

Question 20

Which of the following is the definition of 'market' given by s 4E of the Competition and Consumer Act 2010 (Cth)?

A) An area of close competition between firms.
B) A market in Australia for goods or services and other goods or services which can be substituted for the first mentioned goods and services.
C) An area of actual and potential transactions between buyers and sellers amongst whom there can be strong rivalry.
D) All of the above.

Question 21

Only the Australian Competition Tribunal can make authorisations.

Question 22

Which of the following is NOT an order that can be made under s 87 of the Competition and Consumer Act 2010 (Cth)?

A) An order varying a contract.
B) An order declaring part of a contract void.
C) An order directing the supply of services.
D) An order divesting a party of shares.

Question 23

Which of the following is an example of a prohibited merger in breach of s 50 of the Competition and Consumer Act 2010 (Cth)?

A) The sole manufacturer of a product refuses to sell it other than at an excessively high price.
B) A corporation acquires the assets of its only competitor in a market.
C) A corporation requires purchasers of its products not to acquire goods from or supply goods to a competitor.
D) Two corporations agree to refuse to acquire the goods of a third corporation.

Question 24

When a bank insists that a borrower should insure the mortgaged property with an insurance company in which the bank has a substantial interest:

A) The bank is engaged in 'third line forcing' in breach of s 47(6) of the Competition and Consumer Act 2010 (Cth).
B) The bank is engaged in a 'secondary boycott' in breach of s 45D of the Competition and Consumer Act 2010 (Cth).
C) The bank has entered into an 'exclusionary agreement' in breach of s 45 of the Competition and Consumer Act 2010 (Cth).
D) All of the above.

Question 25

Which of the following does NOT constitute resale price maintenance by a supplier?

A) Jones Ltd refuses to supply goods to Smith's Supermarket unless they agree not to sell below a specified price.
B) Jones Ltd induces Smith's Supermarkets not to sell goods supplied by them below the price specified by their distributors.
C) Jones Ltd supplies goods to Smith's Supermarkets with a request that they do not sell below a recommended price.
D) Jones Ltd and Smith's Supermarkets reach an agreement that goods supplied by Jones Ltd will not be sold below a price nominated by them.

Question 26

To establish a 'contract, arrangement or understanding' in breach of the Competition and Consumer Act 2010 (Cth), a plaintiff has to show evidence of:

A) Adoption of a particular course of action.
B) The meeting of two or more minds.
C) A plan of action.
D) All of the above.

Question 27

Which of the following is one of the mandatory industry codes prescribed under the Competition and Consumer Act 2010 (Cth)?

A) The Wheat Port Code.
B) The Unit Pricing Code.
C) The Franchising Code.
D) All of the above.

Question 28

Two parties who agree to put pressure on a third party not to deal with a fourth party are engaged in a secondary boycott.

Question 29

A seller who supplies goods on condition that the buyer will not re-supply them to a third party is engaged in the practice of exclusive dealing.

Question 30

The Competition and Consumer Act 2010 (Cth) prohibits the existence of monopolies.

Question 31

A merger may sometimes be authorised by the ACCC if:

A) The conduct will result in a benefit to the public.
B) The public benefit outweighs the reduction in competition.
C) The public benefit is outweighed by the reduction in competition.
D) The conduct will not result in a benefit to the public.

Question 32

An authorisation is a determination that the conduct is not contrary to the Act.

Question 33

Increasing the price of petrol during school holidays is often described as predatory pricing.

Question 34

Which of the following is an example of a primary boycott in breach of s 45 of the Competition and Consumer Act 2010 (Cth)?

A) The sole manufacturer of a product refuses to sell it other than at an excessively high price.
B) A corporation acquires the assets of its only competitor in a market.
C) A corporation requires purchasers of its products not to acquire goods from or supply goods to a competitor.
D) Two corporations agree to refuse to acquire the goods of a third corporation.

Question 35

Which of the following is NOT a remedy for breach of the provisions of a voluntary industry Code of Conduct?

A) Damages.
B) A corrective advertising order.
C) The granting of an injunction.
D) A fine.

Question 36

A supplier who supplies goods to a retailer is allowed to recommend a selling price for those goods.

Question 37

Which of the following types of prohibited conduct can NOT be authorised by the ACCC?

A) Mergers.
B) Boycotts.
C) Exclusive dealings.
D) Monopolisation.

Question 38

The secondary boycott provisions are often used by employers as a means of settling industrial disputes.

Question 39

'Deeming' means the effect of the conduct is taken to exist without the need to prove it.

Question 40

Which of the following is an example of a misuse of power in breach of s 46 of the Competition and Consumer Act 2010 (Cth)?

A) The sole manufacturer of a product refuses to sell it other than at an excessively high price.
B) A corporation acquires the assets of its only competitor in a market.
C) A corporation requires purchasers of its products not to acquire goods from or supply goods to a competitor.
D) Two corporations agree to refuse to acquire the goods of a third corporation.

Question 41

Corporations that have become merged in contravention of the Act can be separated by forcing the disposal of shares.

Question 42

A voluntary industry code only applies to those who agree to opt in.

Question 43

Actions to enforce the Act are heard by the Australian Competition Tribunal.