The Repeal of Section 51(3) of the Competition and Consumer Act: A Mistake in Need of Correction

Section 51(3) of the Competition and Consumer Act 2010 (Cth), which exempted certain conditions in intellectual property licences from some competition law prohibitions, was repealed on 13 September 2019. The repeal goes against recommendations of numerous reform bodies and will expose conditions which are benign or indeed pro-competitive to per se prohibitions (which capture certain forms of conduct whether or not that conduct is likely to have anti-competitive effects). The repeal of section 51(3) is a mistake and is based on a faulty understanding of the recommendations made by the Harper Committee and the Productivity Commission. A new intellectual property exemption should be introduced into the Competition and Consumer Act 2010 (Cth) as a matter of urgency to ensure that competitively benign or pro-competitive conditions in intellectual property rights licences are not exposed to per se competition law liability.