Australian Competition law - Restrictive Trade Practices Essay

Australian Competition law - Restrictive Trade Practices Essay

Introduction

The Competition and Consumer Act 2010 (Cth) is a law paased by the Australian Parliament. On January 1st , 2011 the Competition and Consumer Act 2010 was changed by the Trade Practices Act 1974. The law gives security to customers and prevents a number of limiting trading practices by the organizations. It is very significant law in the country for competition. It is managed by the Australian Competition and Consumer Commission and provides a few rights for confidential conducts as well.

The consumer law of Australian of the Competition and Consumer Act 2010 is valid for the trading practices for services and goods which are sold in business value of maximum forty thousand dollars. The buyer can be a company or an individual.

If the transaction value goes above the forty thousand dollars the law still applicable if the services or goods are of a type of customarily purchased for its own, household or domestic consumption or use. The most significant restriction is that the law is just applicable where the buyer and seller are a company (exemptions are enclosed in parts five and six). The majority large stores are companies while small national buyers and sellers can not be.

The law keeps out private auctions and sales as well. It is impossible for customers to sacrifice waive their privileges as per the law, or for buyers and sellers to eliminate them. Wherever there has been a violatation of an expression indirected by the Competition and Consumer Act 2010 (Cth) a buyer has the privilege to withdraw the agreement or contract.

The Case

The Umbrella Corporation Pty Limited (“Umbrella”) is one of Australia's largest pharmaceutical manufacturers and wholesalers. It competes with Racoon City Enterprises Limited (“Racoon”) and Hive Industries Pty Ltd (“Hive”) in the manufacturing and wholesaling of drugs, medicines and other pharmaceutical products.

UC, Racoon and Hive wholesale their products throughout Australia to national chemist retail chains as well as to smaller independent retail chemists in regional and rural areas.

In New South Wales, Alice Jovovich Limited (“Alice”) is a large independent chemist enterprise operating several chemists throughout the Sydney metropolitan area as well as regional NSW in Goulburn and Bowral. Alice obtains about 60% of her medicines from Umbrella, 30% from Racoon and 10% from Hive.

Over the June - July 2011 winter season, an outbreak of the serious influenza “T-virus” caused a significant percentage of Australia's population to fall ill. So serious was the T-virus that many elderly and ill people died and the economy lost approximately $3 billion as a result of infected healthy people taking time off work to recover from the “zombie-like” symptoms of the T-virus.

The outbreak was finally arrested after Umbrella, Racoon and Hive developed a new antibiotic medication called “Red Queen” because of its bright red colour. Red Queen was wholesaled to chemists throughout Australia, including AJ.

After reports that the June-July 2012 winter season would be worse than the 2011 season, every chemist in Australia places ...