Question 1

Morgan and Stanley are the owners of the two largest nail manufacturing businesses in Western Australia.Morgan and Stanley decide to merge to form a single business to take advantage of the economies of scale.In which of the following scenarios is the merger least likely to be objected to by the ACCC?

Accepted Answer

The ACCC is more likely to approve a merger if it benefits consumers by leading to lower prices. Option A is not a desirable outcome for the ACCC as it can lead to anti-competitive behavior by undercutting smaller businesses. Option B is concerning because of the high market share of the merged business, which can lead to a monopoly. Option D is also concerning as it can lead to negative impacts on employees and the economy. Option C, on the other hand, is a desirable outcome for the ACCC as it benefits consumers by leading to lower prices.

Question 2

Tom and Jack are competing suppliers of hair care products.Mary runs a hair salon and wants to sell hair care products at her salon.Which of the following is an example of exclusive dealing?

Accepted Answer

Exclusive dealing occurs when a supplier (Tom) sells products to a buyer (Mary) on the condition that the buyer does not purchase similar products from a competitor (Jack). This is exactly what is happening in option A, as Tom is only willing to sell his products to Mary if she agrees not to purchase hair care products from Jack.

Question 3

Sonny (Australia) Ltd, a manufacturer of electronic goods, has been found to have engaged in resale price maintenance in breach of Part IV of the CCA.Which of the following is not a possible consequence?

Accepted Answer

Resale price maintenance is a civil offense under Part IV of the CCA, not a criminal offense. Therefore, a criminal penalty cannot be imposed. A, B, and C are all possible consequences of engaging in resale price maintenance.

Question 4

Sonny (Australia) Ltd is a manufacturer of electronic goods.Which of the following is an example of resale price maintenance?

Accepted Answer

Option C is an example of resale price maintenance because Sonny is imposing a condition on the retailers not to sell the products below the prices set by Sonny. This guarantees that the prices of Sonny products are maintained at a particular level, restricting price competition among retailers. Options A, B, and D are not examples of resale price maintenance. Option A is an example of price-fixing among retailers, while option B is a refusal to supply based on a particular behavior of the retailers. Option D is an example of selective distribution, and Sonny is enforcing a condition that has been previously agreed upon.

Quiz 12: Competition Law: Dealing With Other Businesses

Tom and Jack are competing suppliers of hair care products.Mary runs a hair salon and wants to sell hair care products at her salon.Which of the following is an example of exclusive dealing?

Sonny (Australia) Ltd, a manufacturer of electronic goods, has been found to have engaged in resale price maintenance in breach of Part IV of the CCA.Which of the following is not a possible consequence?

Sonny (Australia) Ltd is a manufacturer of electronic goods.Which of the following is an example of resale price maintenance?