ACCC gives green light for COVID-19 cooperation

The Australian Competition and Consumer Commission (ACCC) has granted a number of interim authorisations to organisations in particular industries, which allow them to cooperate during the coronavirus pandemic. Ordinarily, competitors cooperating to make decisions is illegal and the antithesis of competition. Authorisations provide statutory permission for organisations to engage in conduct that would ordinarily breach the Competition and Consumer Act 2010 without risking prosecution or private action.  They are granted where the potential public benefits of competitors’ cooperation outweigh concerns about any public detriment.

Usually, the ACCC makes determinations on whether to allow authorisations within six months of receiving a valid application, and undertakes a public consultation process before making the decision.  However, applicants can also request an interim authorisation, which the ACCC will aim to make a determination on within 28 days of the request.  The list of interim authorisations granted as a result of the extenuating circumstances of the pandemic continues to grow, and so far includes those permitting:

• supermarkets to coordinate to maintain grocery supply;
• shopping centre owners to coordinate to develop rent relief measures for small to medium tenants;
• banks to coordinate on providing supplementary relief packages for individuals and businesses;
• gas and electricity providers to coordinate to ensure a stable energy supply and the integrity of wholesale markets;
• medicine wholesalers to coordinate to ensure the distribution of essential medicines and pharmaceutical products;
• airlines to coordinate to develop flight schedules for ten regional flight routes; and
• private health insurers to coordinate on returning excess profits to members and on extending cover to certain other procedures (such as telehealth).

Practical Implications

In the case of the supermarket interim authorisation, for example, the ACCC has given the green light to Coles, Woolworths, Aldi, Metcash, and any other retailer wishing to participate, to coordinate with each other when liaising with manufacturers, suppliers, and logistics providers in their operations.  The supermarkets’ application was approved within a few days, and is directed at the steady distribution of and equitable access to groceries following unprecedented consumer demand stemming from the pandemic.  It allows the supermarkets to coordinate to introduce measures designed to curb grocery stockpiling and reduce strain on supply chains without risking enforcement action.  The authorisation does not permit supermarkets to agree on product pricing.

Making an Application

If you wish to liaise with your competitors for any reason during the pandemic (or are approached by a competitor to do so), you must be aware that this may still be illegal and even criminal conduct.  You should seriously consider seeking ACCC authorisation before engaging in any discussions or joint initiatives with your competitors.  If your business requires ACCC authorisation to cooperate with competitors during the pandemic in a way that might ordinarily breach the Competition and Consumer Act 2010, you can submit an application for an interim authorisation to the ACCC using the specified form, and pay the application fee.  McCullough Robertson can assist you to prepare an application quickly and advise upon your likelihood of success.

This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.