Is a debate on cease and desist orders on the horizon again?

Published On 16/08/2013 | By William Osborn | Litigation, Reform

The pre-election legislative commitments are continuing, with Senator Xenophon suggesting the latest changes to Australia’s competition laws.

Senator Xenophon has announced plans to draft legislation to provide the ACCC with a power to issue ‘cease and desist’ orders during investigations into anti-competitive conduct.  While no details for this proposed legislation have been provided as yet, the announcement comes against the backdrop of the ACCC’s investigation into shopper docket petrol discounts and claims by Senator Xenophon and others that existing competition laws are “weak and ineffective”.

Cease and desist orders are commonly orders (subject to court review) to stop prohibited conduct.  A number of jurisdictions, including the United States and New Zealand, currently enable competition regulators to issue orders to a person or company to cease and desist from engaging in anti-competitive conduct.

The ACCC has previously advocated for the introduction of a cease and desist power for conduct which is an “anti-competitive” use of market power on the grounds of expediency and to avoid “irreversible damage to competition” during an investigation.   This proposal was rejected in the Dawson Review in 2003, and in the earlier Hilmer Review in 1993, on the basis that interim injunctions can be obtained from the courts in a matter of hours and that if the existing evidentiary burden imposed on applicants seeking an interim injunction was lessened, there was a risk of injustice.  The constitutional obstacles to the exercise of a cease and desist power by the ACCC were also cited as a reason for rejecting the introduction of such a power into Australian competition law.

Considering that this issue has been raised during the last two major reviews of our competition laws, if history repeats, the latest call for a cease and desist power will be rejected but we will likely see it proposed again in 2023.

By William Osborn and Melissa Monks

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About The Author

is a solicitor in the Melbourne office at King & Wood Mallesons.

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