I am often mystified by the language adopted to explain competition conduct. Even when I work out what it means, I still scratch my head when I try to work out how a particular term came to describe a certain kind of conduct.
I have put together a basic glossary of these terms below with the assistance of the Competition and Consumer Act 2010 (Cth) and the summaries set out in the ACCC website. I have restricted my definition of each term to three lines or less (as read on my blog). I have hyperlinked the particular term to the appropriate explanatory webpage from the ACCC website, and I have hyperlinked the section number in brackets to the appropriate section of the consolidated Competition and Consumer Act 2010 (Cth) from AustLII.
Bid rigging (s44ZZRD): two or more competitors have a contract, arrangement or understanding that they will not compete genuinely with each other for particular tenders and they allow one of them to win the tender.
Cartel conduct (s45): where there is a contract, arrangement or understanding between competitors to engage in conduct which hinders competition. This anti-competitive conduct includes price fixing, market division, restricting outputs and bid rigging.
Exclusive dealing (s47): a supplier or trader imposes restrictions on another trader's freedom to choose who to trade with, or what to trade in.
Full line forcing (s47): a supplier refuses to supply goods or services to a purchaser unless the intending purchaser agrees not to buy or re-supply goods from a competitor, or agrees not to supply the supplier's goods to a particular place or class of place.
Loss leading (s98): a re-seller discounting products below cost price in order to attract customers to purchase the re-seller's other goods.
Market division (s44ZZRD): agreements between competitors that divide up the market so that the participants are sheltered from competition.
Primary Boycott (s4D): a contract, arrangement or understanding between two or more competitors to refuse to deal, or limit dealings with another supplier or particular customer, or a class of competitor or customer.
Predatory pricing (s46): a company with substantial market power sells its products at a sufficiently low price in order to damage a competitor, or force that competitor out of the particular market for those products.
Price fixing (s44ZZRD): an agreement between competitors that fixes, controls or maintains the price of products.
Resale price maintenance (s96): either an arrangement between a supplier and a re-seller where the re-seller agrees not to sell the supplier's products below a certain price, or a re-seller cutting off, or threatening to cut off, supply to a re-seller because the re-seller has been discounting goods below prices set by the supplier.
Restricting outputs (output controls) (s44ZZRD): where there is a contract, arrangement or understanding between competitors on production or sales quotas to limit the volume of particular products available on the market, with the effect of inflating prices in the market.
Secondary boycott (s45D): two or more people act together which prevents a third party, such as a potential customer or supplier, from dealing with or doing business with a target. The purpose of this is to cause loss substantial loss to, or damage, the target.
Third line forcing (s47): a supplier supplies products to a purchaser on the condition that the purchaser buys products from a particular third party, or the company refuses to supply its products because the purchaser will not agree to that condition.
For more detail on these terms, I suggest going to the Australian Competition Law website or having a look at Russell Miller's Annotated Australian Competition and Consumer Law (33rd Ed, 2011), which is so fresh of the presses that it is coloured green.
Do you have any other odd competition terms? Let me know and I'll add them to the list.
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