The bill inserts a new provision (proposed section 80AD) into the Competition and Consumer Act 2010 that gives courts power, on application by the Australian Competition and Consumer Commission (ACCC), to order directions aimed at reducing a corporation’s market power where the corporation has contravened section 46(1) (misuse of market power). The court may alternatively accept undertakings from the corporation or make consent orders agreed by the parties.
This change adds a statutory structural remedy to the Australian competition toolkit: courts can now be asked to secure a reduction in a dominant firm’s market power rather than rely solely on pecuniary penalties or behavioural remedies. That shift has practical consequences for enforcement strategy, deal planning, and how firms assess the risk of domination findings and settlements.
At a Glance
What It Does
The bill lets the Court, following an ACCC application, issue directions intended to reduce a corporation’s power in or share of a market. The Court can also accept an undertaking from the corporation instead of making an order, or make an order by consent of the parties.
Who It Affects
Corporations found to have, or taken to have, a substantial degree of market power and that have contravened section 46(1); the ACCC as applicant; litigants and courts handling competition matters; and the advisers and counterparties involved in major mergers and restructurings in concentrated markets.
Why It Matters
It formally authorises structural remedies (divestiture-style outcomes) for misuse of market power, expanding the range of enforceable outcomes beyond fines and behavioural undertakings. That change alters risk calculus for dominant firms and could influence how the ACCC negotiates settlements and litigates high-stakes competition cases.
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What This Bill Actually Does
The bill adds a narrowly framed new remedy to the Competition and Consumer Act 2010. It applies where a court has found, or in a related proceeding has found, that a corporation with a substantial degree of power in a market has contravened the prohibition in section 46(1).
On the ACCC’s application, the court may give directions designed to secure a reduction in the corporation’s market power or market share.
Procedurally, the provision contemplates several enforcement pathways. The ACCC may seek an order from the court directing structural change; the court may make a consent order if all parties agree; and the court may accept an undertaking from the corporation as an alternative to a court order.
Those options give the ACCC flexibility to pursue a negotiated remedy or litigate for a court-imposed structural outcome.The bill sets a remedial focus rather than an open-ended sanction: directions must be aimed at securing the specified reduction within a fixed period after the order is made. The new provision is expressly drafted not to limit the court’s existing powers under the Act, so divestiture orders would sit alongside pecuniary penalties and other remedies the court can impose.In practical terms, the provision raises immediate implementation questions: how courts will define the baseline market power or share that must be reduced, what forms of directions (asset sales, business-line divestments, behavioural or structural separations) will be considered appropriate, and how the court will supervise compliance within the prescribed timeframe.
The availability of consent orders and undertakings also creates settlement pathways that could resolve cases without full findings, changing how precedent around section 46(1) may develop.
The Five Things You Need to Know
The new clause applies specifically to contraventions of section 46(1) — the misuse of market power prohibition — and only when the Court has found, or in a related proceeding has found, such a contravention.
The Court may order directions aimed at securing a reduction in the corporation’s power in, or share of, the market, and those directions must achieve the reduction within two years of the order being made.
The ACCC can bring an application for these orders within three years after the date on which the contravention occurred.
The Court may make an order by consent of all parties even if it has not made the factual findings described in the provision, enabling settlement without a formal finding of contravention.
Instead of a court order, the Court may accept an undertaking from the corporation to take particular action to reduce its market power, subject to any conditions the Court thinks fit.
Section-by-Section Breakdown
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Trigger: when the divestiture power applies
Subsection (1) limits the new power to cases in which the Court has found — or a finding exists from another proceeding under the same Part — that a corporation with, or taken to have, a substantial degree of power in a market contravened s46(1). That linkage means the remedy is available only after a misuse-of-power finding (or where an existing finding can be relied on), not as a standalone enforcement tool for unproven conduct.
Remedy: Court may order reduction in market power
Subsection (2) authorises the Court, on ACCC application, to give directions ‘for the purpose of securing’ a reduction in the corporation’s market power or market share. The directions are remedial in character and could encompass structural actions (for example, divestment of assets or business units) or other measures the Court considers necessary to achieve the intended reduction within the timeframe set out elsewhere in the provision.
Timing: application window for the ACCC
Subsection (3) imposes a limitation period: the ACCC must apply within three years after the date of the contravention. That creates a clear deadline for initiating divestiture proceedings, but also raises practical questions about discovery, evidentiary development, and whether latent harms discovered after three years could be remedied under this route.
Consent orders: settlement pathway even before findings
Subsection (4) allows the Court to make an order by consent of all parties to the proceedings, ‘whether or not’ it has made the findings in subsection (1). This provision explicitly preserves settlement: the parties can agree to directions or remedies without the Court having to make formal findings of contravention, potentially speeding resolution but limiting the development of judicial precedent on s46.
Undertakings and non-exclusivity
Subsection (5) permits the Court to accept an undertaking by the corporation, on such conditions as it thinks fit, in lieu of making an order. Subsection (6) clarifies that the new section does not constrain other statutory powers the Court already exercises under the Act. Together these clauses make the divestiture tool additive: courts can impose structural directions, accept conditional undertakings, and still award penalties or other remedies under existing provisions.
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Explore Economy in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Australian Competition and Consumer Commission (ACCC) — gains a statutory structural remedy to seek restoration of competitive conditions, strengthening its bargaining position in settlement negotiations and its litigation toolbox.
- Competitors and potential entrants in concentrated markets — may benefit if courts order divestiture or other measures that reduce the dominant firm's market power and open space for rival firms.
- Consumers in affected markets — stand to gain from increased competition if structural remedies succeed in restoring pre‑contravention levels of rivalry, which can lower prices and increase choice.
Who Bears the Cost
- Dominant corporations found to have misused market power — face the risk of enforced divestment or forced restructuring, with associated value loss, operational disruption and reputational cost.
- M&A counterparties and investors — deals could be unwound or require remedial carve-outs, increasing transaction risk and due-diligence burdens where target firms have concentrated market positions.
- Courts and enforcement agencies — will shoulder greater resource and technical burdens (market definition, remedy design, supervision of compliance) to craft and monitor complex structural orders within the statutory timeframe.
Key Issues
The Core Tension
The central tension is between restoring competitive structure quickly and predictably versus preserving legal certainty and workable administration: aggressive structural remedies can more effectively repair anticompetitive outcomes but impose heavy, uncertain costs on firms, investors and courts; conversely, limiting remedies to behavioural fixes and fines avoids disruptive interventions but may leave entrenched market power intact.
The provision is concise but leaves key implementation details open. It does not define how a court should quantify the ‘reduction in the corporation’s power in, or share of, the market’ — a measurement problem that will require evidence-based market definition, baseline selection and choice of appropriate metrics (market share, supply capability, pricing power indicators).
That ambiguity gives courts flexibility but also creates litigation costs and uncertainty for firms deciding whether to settle or fight.
The statutory timeframes create competing pressures. A three-year window for the ACCC to apply puts a hard limit on when structural relief can be sought, but a two-year compliance target for achieving the reduction (specified elsewhere in the Act) may be short for substantial divestments or business separations that require finding buyers, securing regulatory approvals, or disentangling integrated operations.
The acceptance of undertakings and consent orders supports negotiated exits from litigation, but settlements without formal findings may produce less public guidance about what conduct crosses the line under s46(1). Finally, although the clause says it does not limit other court powers, the cumulative use of structural remedies alongside pecuniary penalties raises questions about proportionality, overlap and potential challenges (commercial, administrative or even constitutional in fringe cases) about compensation or regulatory overreach.
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