Exclusivity Agreements ACCC: Understanding the Australian Competition and Consumer Commission`s Approach

Exclusivity agreements are a common business practice in which two or more parties agree not to do business with any other parties outside of the agreement. These agreements are often used to protect intellectual property, reduce competition, and generate revenue. However, in some cases, exclusivity agreements can be anti-competitive and harm consumers. This is where the Australian Competition and Consumer Commission (ACCC) comes in.

The ACCC is an independent statutory authority that promotes competition and fair trade in Australia. They are responsible for enforcing the Competition and Consumer Act 2010, which prohibits anti-competitive conduct. The ACCC takes a strong stance against exclusivity agreements that harm competition and consumers.

In 2020, the ACCC released a report on the impact of digital platforms on competition in media and advertising markets. The report highlighted that exclusivity arrangements between digital platforms and media companies can lead to a reduction in competition and choice for advertisers. The report recommended that the ACCC should continue to monitor these arrangements and take enforcement action where necessary.

The ACCC has taken enforcement action against a number of companies for anti-competitive exclusivity agreements. In 2020, the ACCC took legal action against iSelect, an online comparison website, for engaging in an anti-competitive agreement with health insurers. The agreement prevented health insurers from dealing with iSelect`s competitors, which resulted in higher prices for consumers. The case was settled with iSelect admitting to engaging in anti-competitive conduct and paying a $8.5 million penalty.

Similarly, in 2019, the ACCC took action against Ultra Tune, a franchise chain of auto repair shops, for engaging in an anti-competitive agreement with a supplier of automotive parts. The agreement prevented the supplier from supplying parts to other auto repair shops, which reduced competition and resulted in higher prices for consumers. The case was settled with Ultra Tune admitting to engaging in anti-competitive conduct and paying a $2.6 million penalty.

Exclusivity agreements can be beneficial for businesses, but they can also harm competition and consumers. It is important for businesses to ensure that their exclusivity agreements comply with competition law and do not harm competition. The ACCC takes a strong stance against anti-competitive exclusivity agreements and will take enforcement action where necessary. If you are unsure about the legality of your exclusivity agreement, it is advisable to seek legal advice.