Comp Law In Australia: What Businesses Need To Know

Competing well is good for business and good for customers. It pushes you to innovate, sharpen your pricing, and deliver better service. In Australia, competition law (often shortened to “comp law”) sets the ground rules for that competition so everyone gets a fair go.

If you’re negotiating supply terms, thinking about an exclusive distribution deal, chatting to competitors at an industry event, or considering a merger, comp law is in the background. Understanding the basics will help you grow with confidence and avoid costly mistakes.

In this guide, we break down what competition law covers, how it applies to small and growing businesses, and the practical steps you can take to stay compliant. We’ll also touch on how comp law sits alongside other key areas like consumer law, privacy and employment.

Let’s get you across the essentials so you can focus on building your business-without unnecessary risk.

What Is Competition Law In Australia?

Competition law in Australia mainly lives in the Competition and Consumer Act 2010 (CCA), which is enforced by the Australian Competition and Consumer Commission (ACCC). The objective is simple: promote healthy competition and prevent conduct that harms markets and consumers.

Broadly, comp law regulates:

• Anti-competitive agreements and cartel conduct (e.g. price fixing, bid rigging, market sharing)
• Misuse of market power (using substantial market power in a way that harms competition)
• Exclusive dealing (including third line forcing) and other arrangements that may substantially lessen competition
• Resale price maintenance (setting minimum prices for resellers)
• Mergers and acquisitions that may reduce competition

Important accuracy notes for Australian businesses:

• Third line forcing is no longer automatically illegal in all cases. Since reforms in 2017, it’s assessed under a “substantial lessening of competition” test. Businesses can seek ACCC authorisation or lodge a notification in certain circumstances.
• Merger notification is voluntary in Australia. There’s no mandatory filing regime, but the ACCC can investigate and oppose deals that would substantially lessen competition. Many businesses still seek informal clearance or authorisation for certainty.

Consumer protections (the Australian Consumer Law) sit alongside comp law in the CCA, but they deal with different issues-like misleading and deceptive conduct, unconscionable conduct and consumer guarantees. Both regimes can apply to the same business activities, but it’s useful to keep their purposes distinct.

Does Comp Law Apply To Small Businesses?

Yes. Competition law applies to all businesses in Australia-sole traders, startups, franchises, SMEs and large corporates. You don’t need to be a big player to attract ACCC attention.

Common small-business scenarios where comp law is engaged include:

• Discussing future pricing or tenders with competitors (even casually at industry events)
• Agreeing not to “poach” each other’s clients or territories
• Signing exclusive supply or distribution agreements
• Setting rules for resellers that restrict discounting
• Negotiating marketplace parity clauses or “most favoured customer” terms

Not knowing the rules is not a defence. The good news is that with a few practical guardrails-clear contracts, sensible policies and a culture of compliance-you can manage the risks.

Key Conduct The ACCC Watches Closely

Cartels And Collusion

Cartel conduct is one of the most serious breaches. It includes agreements between competitors to fix prices, rig bids, share markets or restrict output. These are criminal offences as well as civil contraventions.

Examples include agreeing on minimum prices, coordinating a tender outcome, or allocating customers by region. The “agreement” doesn’t need to be formal or written-informal understandings and “gentlemen’s agreements” can still be illegal.

Penalties can be severe. Companies face very large fines, and individuals can be personally fined and even imprisoned for criminal cartel conduct.

Misuse Of Market Power

If your business has substantial market power (for example, you hold a strong position in a niche market or a regional area), using that power in a way that has the purpose, effect or likely effect of substantially lessening competition is unlawful.

This can capture conduct like predatory pricing designed to eliminate a competitor, or tying and bundling strategies that lock out rivals. You don’t need to be a national giant-what matters is the competition impact in the market where you operate.

Exclusive Dealing (Including Third Line Forcing)

Exclusive dealing covers conditions on supply or acquisition that limit who a customer or supplier can deal with. For example, a requirement that a retailer only stock your brand, or a condition that a distributor not sell competing products.

Third line forcing is a specific type of exclusive dealing: making your supply conditional on the customer buying goods or services from a particular third party. This used to be automatically prohibited, but now it’s assessed under the “substantial lessening of competition” test. In some cases, businesses can minimise risk by seeking ACCC authorisation or lodging a notification.

Resale Price Maintenance

Resale price maintenance (RPM) is generally prohibited. This is when a supplier tries to control the minimum price that resellers must charge, or pressures them not to discount below a certain level. You can recommend a retail price and publish a recommended price list, but you should not enforce a minimum price or penalise discounting.

There is an ACCC authorisation pathway for RPM in limited cases where public benefits outweigh the detriments, but you should get advice before going down that route.

Mergers, Acquisitions And Joint Ventures

Transactions that would, or are likely to, substantially lessen competition can be opposed by the ACCC. Australia’s merger regime is voluntary-there’s no mandatory filing-but parties commonly seek informal clearance or authorisation for significant deals, particularly where competitors are involved.

The same competition lens can also apply to certain joint ventures, information-sharing collaborations or strategic alliances between competitors. If those arrangements could soften competition, speak with a lawyer before proceeding.

Practical Compliance Steps For Everyday Business

Comp law compliance doesn’t have to be daunting. Start with simple, practical habits and build from there.

Put Guardrails Around Information Sharing

• Don’t share or receive competitively sensitive information with competitors. This includes future pricing, discount plans, margins, customer lists, capacity, costs and tender strategies.
• If you participate in an industry association, avoid discussions that could stray into anti-competitive territory. Leave the room or object if needed, and keep agenda notes.
• Be cautious with benchmarking and “market intelligence” providers-ensure data is historical, anonymised and aggregated so it doesn’t reveal individual competitor strategies.

Review Contracts For Competition Risks

• Check exclusivity clauses, territorial restrictions, parity clauses, and non-compete provisions for competition risk and proportionality.
• Avoid clauses that control resale pricing. It’s okay to recommend a retail price, but enforcing a minimum resale price is high risk.
• Where appropriate, consider whether ACCC authorisation or notification is available and commercially sensible.

Train Your Team

• Give practical training to sales, procurement and senior managers on what they can and can’t discuss with competitors.
• Set a simple escalation rule: if something feels like it may limit competition, pause and get legal advice before agreeing to it.

Have A Plan For ACCC Contact

• If the ACCC contacts your business or conducts a dawn raid, ensure staff know who to call, what to do and how to preserve records.
• Respond cooperatively and keep a record of interactions. Early, informed engagement helps manage risk.

Contracts And Documents That Support Compliance

Good contracts and policies won’t replace compliance, but they set clear expectations, reduce ambiguity and help your team do the right thing day-to-day.

• Business Terms: Clear customer terms that set out pricing, deliverables, limitations and lawful commercial protections reduce the temptation to rely on informal understandings with competitors. Consider having tailored Business Terms drafted for your model.
• Supply Agreement: If you buy or sell through distribution, a well-drafted Supply Agreement can handle exclusivity, territories, marketing standards and termination rights in a compliant way.
• Privacy Policy: When you collect customer or competitor data (e.g. through a website or platform), a compliant Privacy Policy and data governance plan help ensure you’re not misusing information in ways that raise competition or privacy concerns.
• Employment Contract: Set expectations for staff conduct, confidentiality and communication with competitors in an Employment Contract and relevant workplace policies.
• Shareholders Agreement: If you have co-founders or investors, a Shareholders Agreement aligns decision-making and growth plans so commercial tensions don’t spill into risky competitor dealings.
• Non-Disclosure Agreement (NDA): Use an NDA to protect confidential information in legitimate collaborations. Note that NDAs don’t “permit” sharing competitively sensitive pricing or future strategy with competitors-competition rules still apply.
• Website Terms And Conditions: If you run a marketplace or platform, robust Website Terms and Conditions can address fair use, pricing displays and prohibited conduct between users.

You won’t need every document listed here, but most growing businesses benefit from several. The key is to tailor them to your model and your market.

How Competition Law Interacts With Other Australian Laws

Comp law is one piece of your broader compliance picture. A few overlaps to keep in mind:

• Australian Consumer Law (ACL): Advertising, pricing representations and product claims must be accurate. Misleading or deceptive conduct is unlawful under the ACL, which sits as Schedule 2 to the CCA. If your marketing or pricing strategies change, sanity check them against section 18 of the ACL.
• Privacy And Data: Using data to segment markets or target competitors is normal-just ensure you’re collecting and using personal information lawfully and transparently (and that internal access to sensitive data is controlled).
• Employment: Non-compete and non-solicit clauses in employment agreements should be reasonable and no broader than necessary. Overly restrictive clauses may raise enforceability and policy concerns, and in some contexts can intersect with competition considerations.

A quick cross-check of your commercial strategy against these areas will save headaches later on.

Frequently Asked Questions

Is It Ever Okay To Talk To Competitors?

Yes, but be disciplined. Avoid sharing or obtaining forward-looking, competitively sensitive information (future prices, margin targets, customer lists, tender plans). If you’re collaborating for a legitimate purpose-like standards setting or a joint bid-get legal advice on guardrails and documentation first.

Can I Require Retailers Not To Discount?

That’s high risk. Resale price maintenance (setting or enforcing minimum resale prices) is generally prohibited. You can recommend a retail price and implement lawful brand standards, but you should not threaten or penalise discounting.

Do I Have To Tell The ACCC About A Merger?

There is no mandatory merger filing in Australia. However, the ACCC can investigate and oppose transactions likely to substantially lessen competition. Many parties seek informal clearance or authorisation for certainty before completing significant deals.

Are Exclusive Distribution Deals Allowed?

Often, yes-if they don’t substantially lessen competition. The details matter: market shares, duration, scope and the availability of alternatives all feed into the analysis. Build a pro‑competitive rationale and have the terms reviewed before you sign.

We’re A Small Business-Will The ACCC Really Care?

The ACCC routinely investigates matters involving SMEs, especially where the conduct harms competition or consumers in a local or niche market. It’s best to set up good habits early.

Key Takeaways

• Competition law in Australia prohibits cartels, misuse of market power, anti-competitive exclusive dealing, resale price maintenance, and mergers that substantially lessen competition.
• Third line forcing is no longer automatically illegal in all cases; it’s assessed under a competition test, with authorisation or notification options in some scenarios.
• Merger notification is voluntary, but the ACCC can still review and oppose deals-many parties seek informal clearance for certainty.
• Small businesses are covered by comp law too. Avoid sharing competitively sensitive information, and review exclusivity, parity and pricing clauses carefully.
• Support compliance with clear contracts and policies-think Business Terms, a Supply Agreement, a Privacy Policy, solid Employment Contracts and, where relevant, a Shareholders Agreement and NDAs (used appropriately).
• Keep an eye on related obligations under the ACL, privacy and employment law so your commercial strategy is compliant end-to-end.

If you would like a consultation on competition law or need help reviewing your contracts and policies, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.