s47: Exclusive Dealing and Third Line Forcing
Isn’t it about time Australian franchisees were given a fair go when it comes to interpreting s47 of the Trade Practise Act 1974. I imagine the US equivalent ‘tie in’ legislation is a little more complicated.
The ACCC gives a description of the subject HERE:
Third line forcing is a specific form of exclusive dealing prohibited outright by the Trade Practices Act. It is not subject to the substantial lessening of competition test. It involves the supply of goods or services on condition that the purchaser buys goods or services from a particular third party, or a refusal to supply because the purchaser will not agree to that condition.
s47 is not even a long, complicated piece of legislation but the problem appears to be a convenient ACCC misplacement of the intent of that law and a refusal to acknowledge and advise government where change is required.
Currently where it is deemed by the ACCC that under s47 if there is no public detriment an application for Authorization to apply mandatory purchasing demands on franchisees gets the nod without consideration to any detriment to any party within the bounds of the behaviour applied for.
Not even a ‘checks and balances’ test to see where any benefit or detriment lies and to what extent.
In other words; franchisees continually get stiffed, and usually churned, as the ACCC’s Chairman Graeme Samuel continually makes more and more friends. Seriously; we now have a situation so blatantly abused that franchisors apply for, and get, Authorization for carte blanche revenue streaming.
The cure is an addition to s47 to redefine what constitutes approval for Authorizations where all benefit v detriment is considered. Then and only then do powerless franchisees have a shot at a fair go and then Australia might see terribly devastating rorts quickly removed and large chunks of complaints gone.
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About Ray Borradale
Public Profile
Forty years experience in Small Business and twenty-four years in franchising operations as a franchisee and employed by three franchisors, mostly in operations.
I have dedicated ten years and close to 15,000 hours in the pursuit of quality franchising and exposing franchisor abuse of franchisees while advocating for the introduction of franchise relationship Law and the levelling of the dispute processes between bigger business and small business.
Contact: ozfranchising@hotmail.com
Area of Interest
Franchise Operations
