Question 1

A business that takes steps or makes an agreement that is designed to maintain or control the price of goods is engaging in:

Accepted Answer

Price fixing occurs when businesses agree to set prices at a certain level, often resulting in higher prices for consumers and limited competition in the market. This behavior is illegal and can be punished by antitrust laws.

Question 2

What is a 'secondary boycott'?

Accepted Answer

A secondary boycott occurs when two or more businesses put pressure on a third business (which they have no dispute with) in order to encourage it not to deal with a fourth 'target' business that is the subject of the boycott. This is often seen as an unlawful tactic by unions and other organizations in labor disputes.

Question 3

The Trade Practices Tribunal described a market as having five different dimensions that it will consider when determining whether or not that market is competitive.It identified one of these dimensions as being the most crucial.Which is it?

Accepted Answer

The Trade Practices Tribunal identified barriers to entry as the most crucial dimension in determining whether a market is competitive. This is because if there are high barriers to entry, it is difficult for new businesses to enter the market and compete with existing businesses, which can lead to limited competition and higher prices for consumers.

Question 4

What is a 'per se offence' under Part IV of the Competition and Consumer Act 2010 (Cth)?

Accepted Answer

A 'per se offence' is an offence that is deemed anti-competitive and prohibited outright under Part IV of the Competition and Consumer Act 2010 (Cth). There is no need to prove the actual impact on competition, as the conduct is considered inherently harmful. Examples include price-fixing and market allocation agreements between competitors.

Question 5

The prohibition of misuse of market power under the Competition and Consumer Act 2010 (Cth) is not designed to:

Accepted Answer

The prohibition of misuse of market power under the Competition and Consumer Act 2010 is aimed at preventing businesses from misusing their market power in a way that harms competition, not at preventing them from having substantial market power in the first place.

Question 6

The role that was once performed by Price Surveillance Authority ('PSA') is now undertaken by the Australian Competition and Consumer Commission ('ACCC').That role is:

Accepted Answer

The role that was once performed by Price Surveillance Authority ('PSA') is now undertaken by the Australian Competition and Consumer Commission ('ACCC'). The role is to monitor prices in areas where competition is not effective to protect consumers and ensure efficient prices. Therefore, the correct choice is C.

Question 7

There were three important changes to the law introduced by the Competition Policy Reform Act 1995 (Cth).Which of the following is not one of them?

Accepted Answer

The establishment of the office of the Consumer Ombudsman was not one of the changes introduced by the Competition Policy Reform Act 1995 (Cth).

Question 8

According to the ACCC, a misuse of market power by a business is generally not the type of conduct that:

Accepted Answer

A misuse of market power refers to a business using its dominant market position to eliminate or significantly reduce competition, thereby harming consumers and the competitive process. Such conduct cannot be justified as efficient or genuine commercial rivalry. Therefore, option D is correct, as it correctly states that a misuse of market power cannot be explained in terms of efficiency or genuine commercial rivalry. Options A, B, and C are incorrect because they all describe types of conduct that are characteristic of a misuse of market power.

Question 9

A few years ago anti-trust proceedings (proceedings for uncompetitive conduct) were brought against Microsoft in the USA.The company was alleged to have abused its monopoly in the desktop operating systems market.The Court decided that:

Accepted Answer

The court found that there was a significant 'barrier to entry' in the market, making it prohibitively expensive for potential competitors to develop a viable alternative to Windows, which contributed to Microsoft's monopoly position.

Question 10

Which of the following types of secondary boycotts will contravene The Competition and Consumer Act 2010 (Cth)?

Accepted Answer

Secondary boycotts that aim to create a monopoly in the marketplace contravene The Competition and Consumer Act 2010 (Cth) because they can distort competition and market dynamics.

Question 11

Which of the following is not a per se offence under the Competition and Consumer Act 2010 (Cth) and is therefore not prohibited unless it has the effect of substantially lessening competition?

Accepted Answer

Primary boycotts, price fixing, and resale price maintenance are per se offences under the Competition and Consumer Act 2010 (Cth), meaning they are considered inherently anti-competitive and are prohibited regardless of their effects on the market. Secondary boycotts, on the other hand, are not per se offences, which means they are only prohibited if they have the effect of substantially lessening competition.

Question 12

The difficulties of establishing the extent of a particular 'market' under Part IV of the Competition and Consumer Act 2010 (Cth) are numerous.This is because:

Accepted Answer

Trading activities often span multiple sectors and do not fit neatly into clearly defined markets, making it challenging to establish the extent of a particular market.

Question 13

ASIC cannot authorise:

Accepted Answer

The answer of ASIC cannot authorise:
...

Question 14

Which of the following cannot be authorised by ASIC?

Accepted Answer

Misuse of market power is regulated by the Australian Competition and Consumer Commission (ACCC) and not by ASIC. The other options are all within ASIC's authority as they relate to enforcing competition laws and regulating mergers and acquisitions.

Question 15

Sonny (Australia) Ltd, a manufacturer of electronic goods, has been found to have engaged in resale price maintenance in breach of Part IV of the CCA.Which of the following is not a possible consequence?

Accepted Answer

A criminal penalty is not a possible consequence for a breach of Part IV of the CCA. Resale price maintenance is a civil breach, not a criminal offense. The possible consequences for such a breach include injunctions, compensation to customers, and fines.

Question 16

The Competition and Consumer Act 2010 (Cth) prohibits 'exclusive dealing'.Exclusive dealing occurs when:

Accepted Answer

Exclusive dealing occurs when a business imposes restrictions on the capacity of another business to choose where and from whom it buys products.

Question 17

What is the correct name for the type of actions that are only prohibited under the Competition and Consumer Act 2010 (Cth) Part IV if they have the effect of substantially lessening competition?

Accepted Answer

These are known as conditional offences, as they are only prohibited if they have the effect of substantially lessening competition, rather than being prohibited outright (per se) or without exception (strict or contingent).

Question 18

While the Competition and Consumer Act 2010 (Cth) does not comprehensively define a 'market', the Courts usually accept the wide definition of a market as:

Accepted Answer

The definition of a market as "the area of close competition or field of rivalry between businesses" is widely accepted by the Courts. While the other options may also be relevant to specific contexts, they do not provide as comprehensive a definition of the term "market" as option A.

Question 19

The ACCC is closely monitoring competition in the Australian wine industry.Which of the following factors is least likely to be emphasised by the ACCC in determining whether or not the wine market in Australia is competitive?

Accepted Answer

The volume of wine consumed in Australia is not as relevant to competition in the wine industry as factors such as the number of producers and barriers to entry. The ACCC is more concerned with the structure of the market and the behavior of wine producers in relation to their competitors.

Question 20

In determining whether conduct by a business has the effect of substantially lessening competition, which of the following issues need not be considered?

Accepted Answer

While competition is generally considered a desirable goal, it is not necessary to consider whether it is desirable in determining whether conduct by a business has the effect of substantially lessening competition. The relevant issues to consider are the existence of a relevant market, whether the conduct did or was likely to lessen competition in that market, and whether the purpose of the conduct was likely to lessen competition.

Quiz 12: Dealing With Competitors