The ACCC has granted interim authorisation allowing retailers to collectively bargain with landlords about rent relief during the COVID-19 pandemic.

The interim authorisation, granted to the Australian Retailers Association and its current and future members, will also allow retailers to share information relevant to the negotiations including in relation to requests by landlords for certain information as part of considering and negotiating support to be provided in the context of COVID-19.

“We see a clear public benefit in allowing retailers to work together in the negotiations with landlords as it will help those tenants who are experiencing financial hardship during this pandemic to reach a fair outcome,” ACCC Chair Rod Sims said.

“We need to maintain strong competition in the retail sector and supporting these businesses will help with economic recovery once the pandemic subsides.”

The authorisation is voluntary and temporary, and does not include individual tenants exchanging information about the amount of their rent or any rent incentives they were previously granted. 

It is planned that the proposed co-operation will have regard to the proposed mandatory Code of Conduct which sets out the good faith leasing principles applicable between landlords and small and medium shopping centre tenants.

“As with all of the temporary arrangements that industries are looking to implement as a means to deal with the COVID-19 issues they are facing, we will keep under consideration when they are no longer necessary,” Mr Sims said.

Having granted interim authorisation for the arrangements, the ACCC will now seek feedback on the application for final authorisation which is sought for a period of 12 months from the date of authorisation.

More information, including the ACCC’s interim authorisation decision, is available at Australian Retailers Association.

Background

The Australian Retailers Association is Australia’s largest retail industry association and provides advice, education and advocacy for its approximately 7,500 members.

On 3 April 2020 the ACCC granted interim authorisation allowing shopping centres to co-operate to support retail tenants financially impacted by COVID-19.

Notes to editors

ACCC authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010.

Section 91 of the Act allows the ACCC to grant interim authorisation when it considers it is appropriate. This allows the parties to engage in the proposed conduct while the ACCC is considering the merits of the substantive application.

The ACCC may review a decision on interim authorisation at any time, including in response to feedback raised following interim authorisation.

Broadly, the ACCC may grant a final authorisation when it is satisfied that the likely public benefit from the conduct outweighs any likely public detriment.

7-Eleven and its franchisees have been granted conditional interim authorisation to discuss potential temporary store closures or reduced trading hours in light of reduced customer demand because of COVID-19 restrictions.

7-Eleven owns and operates stores in competition with its franchisees in some areas and therefore discussions and agreements between them risk breaching the competition laws.

“We recognise that 7-Eleven and its franchisees are facing difficult trading conditions due to the COVID-19 pandemic, and believe this co-operation could help the network and individual stores to remain viable,” ACCC Chair Rod Sims said.

“Importantly, franchisees are not required to temporarily close or reduce their store hours if they do not wish to. Our decision to grant interim authorisation does not force franchisees to agree to the terms offered by 7-Eleven.”

Franchisees that agree to close temporarily will receive an ex-gratia payment from 7-Eleven to cover certain unavoidable operational costs. For franchisees that agree to reduce their hours, the minimum guaranteed income that the franchisee receives from 7-Eleven would be pro-rata adjusted to reflect the temporary reduction in trading hours.

“Franchisees are strongly encouraged to seek independent legal and financial advice when considering whether to adopt these temporary measures,” Mr Sims said.

Interim authorisation is subject to a condition that requires 7-Eleven to notify the ACCC of arrangements reached with franchisees to provide some ACCC oversight.

“We are going to closely monitor the effect of these arrangements and when it is appropriate for this authorisation to be revoked,” Mr Sims said.

Having granted interim authorisation for the arrangements, the ACCC will seek feedback on 7-Eleven’s application for authorisation. 

Details on how to make a submission and more information, including the ACCC’s interim authorisation decision, is available at 7-Eleven Stores Pty Limited.

Background

Authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010.

The Franchising Code of Conduct will continue to apply to franchisees that operate non-fuel stores and the Oil Code will continue to apply to franchisees that operate fuel stores. Both codes contain a dispute resolution process.

Dispute resolution services are provided by the Australian Small Business and Family Enterprise Ombudsman (ASBFEO). More about resolving franchising disputes and oil code dispute resolution is available on the ACCC website.

Section 91 of the Act allows the ACCC to grant interim authorisation when it considers it is appropriate. This allows the parties to engage in the proposed conduct while the ACCC is considering the merits of the substantive application.

The ACCC has granted unconditional merger authorisation to Gumtree’s proposed acquisition of Cox Australia Media Solutions (Cox Media), allowing Gumtree Cars to be combined with Cox Media’s Carsguide and Autotrader sites.

“We authorised this merger because we concluded it was not likely to lead to a substantial lessening of competition, including in the supply of online automotive classifieds in Australia. Therefore it was not necessary to consider the public benefit limb of the authorisation test,” ACCC Chair Rod Sims said.

Carsales is the leading provider of online automotive classified advertising in Australia and is a significant competitive constraint on Gumtree and Cox Media. Facebook Marketplace is also a growing competitor to Gumtree and Cox Media in the supply of online automotive classifieds services.

“Our investigation showed that Carsales and Facebook Marketplace are likely to continue to provide significant competition in online automotive classifieds after Gumtree acquires Cox Media,” Mr Sims said.

“We also found that Gumtree and Cox Media focus on different segments, with Gumtree focussing on private seller listings and Cox Media focussing on dealer listings.”

The ACCC also investigated the impact of the acquisition on the supply of online display advertising on digital automotive content providers.

The ACCC was satisfied that the acquisition is unlikely to result in a reduction of competition for supplying online display advertising to advertisers wishing to target potential car buyers.

“Many advertisers use third parties to place targeted advertisements to individual consumers based on browsing history data on a wide range of websites. Further, we found there are a range of other digital automotive content providers where direct advertisers could place automotive-related advertising, including Drive, Carsales, GoAuto and digital versions of automotive print publications,” Mr Sims said.

The ACCC’s determination is available at Gumtree AU Pty Ltd proposed acquisition of Cox Australia Media Solutions Pty Ltd.

Background

Gumtree’s application is the second merger authorisation application following reforms in 2017 to the merger authorisation process, which reinstated the ACCC’s ability to consider applications for merger authorisation. Previously authorisation applications were made directly to the Australian Competition Tribunal.

Merger authorisation provides an alternative avenue for merger clearance to the informal merger review process, which is the most commonly used avenue used by merger parties. The authorisation process is public. If merger authorisation is granted, merger parties are exempt from the merger laws.

The ACCC may grant authorisation for a proposed merger if it is satisfied the merger is not likely to substantially lessen competition, or where the likely public benefits outweigh the likely public detriments.

Gumtree sought merger authorisation for its proposed acquisition of Cox Media. Gumtree (through Gumtree Cars) and Cox Media (through Carsguide/Autotrader) both offer online automotive classified advertising to private and dealer sellers in Australia. Gumtree and Cox both sell third parties display advertising space on their websites and mobile applications.

Gumtree is a subsidiary of eBay Classifieds Holding BV, whose ultimate parent company is eBay Inc. eBay operates a multi-category general classifieds website in Australia.

Cox Media is a subsidiary of Cox Automotive, which is 70 per cent owned by Cox Automotive International Sarl and 30 per cent owned by DealerMotive Ltd, a consortium of Australian dealer groups. Carsguide and Autotrader provide automotive editorial content and automotive classifieds.

The ACCC has revoked an interim authorisation due to the change in market conditions caused by the COVID-19 pandemic. The ACCC granted the interim authorisation in February to five major car rental companies to jointly negotiate with Cairns Airport including discussions about their lease agreement for space, such as parking bays and counter space at the airport.

The rental companies, Avis, Budget, Hertz, Europcar, and Thrifty, had lodged their application for authorisation in late 2019, but since then, the COVID-19 pandemic has severely impacted the economy’s travel and car rental sectors.

The ACCC decided to revoke the interim authorisation after a request by the car rental companies that the ACCC delay its decision about the substantive application. This request has been granted.

The companies also indicated they would voluntary suspend collective negotiations, permitted under the interim authorisation, during the delay in considering the application.

“As the companies are not proposing to engage in the authorised conduct in the current circumstances, the interim authorisation is clearly no longer needed and it is appropriate we revoke it,” ACCC Commissioner Stephen Ridgeway said.

“Any authorisation, including interim authorisations, should only be in place for as long as they are needed.”

“The car rental companies have indicated they have no current need to be allowed to engage in the conduct, which, without authorisation, could be in breach of competition laws,” Mr Ridgeway said.

“We are closely monitoring when to revoke any interim authorisations, including those granted because of the COVID-19 pandemic, and we expect them to cease when they are no longer appropriate. We also expect authorised parties to keep the ACCC updated of any relevant changes that impact their authorisation.”

The substantive application involved a request for the five car rental companies to collectively negotiate all terms and conditions (both price and non-price) related to the acquisition of airport space and services from Cairns Airport under licence and lease agreements, including a turnover percentage, car parking fees, rental payment and concessions.

The interim authorisation did not extend to entering into collectively negotiated agreements.

“Irrespective of ACCC monitoring in place of the arrangements, allowing the interim authorisation to continue during this period could involve some risk of adverse effects to the interest of Cairns Airport, during the extended review timetable for this matter. The car rental companies can easily and quickly re-apply for interim authorisation at any stage if it becomes necessary,” Mr Ridgeway said.

The ACCC extended the timetable to make a final decision on the application for authorisation by six months. It will seek feedback from interested parties at a later stage.

More information, including the ACCC’s revocation authorisation decision, is available at Car rental operators at Cairns Airport.

Background

On 28 November 2019, the ACCC received an application by six car rental companies seeking authorisation for 10 years in relation to negotiations for space, including counter space, car parking bays and shared facilities, at Cairns Airport. The ACCC conducted public consultations.

On 13 February 2020 the ACCC granted interim authorisation to WTH Pty Ltd trading as Avis Australia, Budget Rent a Car Australia Pty Ltd, Hertz Australia Pty Limited, CLA Trading Pty Ltd trading as Europcar, and Kingmill Pty Ltd trading as Thrifty Car Rental and Dollar Car Rental to prepare for negotiations, and negotiate with Cairns Airport Pty Ltd.

A sixth rental company, Redspot Head Office Pty Ltd (trading as Enterprise, Alamo, National and Redspot), withdrew its request for authorisation on 28 April.

On 26 March 2020, the ACCC issued a draft determination proposing to grant authorisation for five years and sought submissions from interested parties.

Notes to editors

ACCC authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010.

Section 91 of the Act allows the ACCC to grant interim authorisation when it considers it is appropriate. This allows the parties to engage in the proposed conduct while the ACCC is considering the merits of the substantive application.

The ACCC may review a decision on interim authorisation at any time, including in response to feedback raised following interim authorisation.

Broadly, the ACCC may grant a final authorisation when it is satisfied that the likely public benefit from the conduct outweighs any likely public detriment.