When it comes to the University’s dealings with suppliers, retailers and students, the Competition & Consumer Act 2010 (CCA) lays down the law.
The purpose of the CCA is to protect consumer choice by preventing unfair trade or anti-competitive practices.
Third line forcing is a type of prohibited conduct that involves the supply of a good or service to a customer on condition that the customer purchases other goods or services from a third party.
Let’s say, for example, that the Sports Association makes a deal with a particular sports store that the store will supply University rugby jumpers at a discount price to students. The Sports Association then makes it a condition of membership that students purchase their rugby jumpers from the particular sports store.
This is third line forcing and the Sports Association could be fined.
Similarly, refusing to allow someone to join the Association until they purchased goods or services from the preferred store would also be third line forcing.
Third line forcing carries significant penalties for both organisations and individuals.
- Organisations can be fined up to $10 million or 10% of annual turnover (whichever is greater).
- Individuals could face penalties of up to $500,000 or 10 years in jail for any one offence under the Act.
It isn’t enough to say that you were trying to get a good deal for everyone. Ignorance or good intentions won’t hold up in court!
Being compliant with the CCA means putting consumer choice first:
- You can recommend the product of a third person to a customer or student BUT you can’t compel them to buy the product as a condition.
- Don’t refuse to provide a service or product until a customer or student has purchased something else.
- Remember that students, distributors and retailers are free to choose where they make their purchase.
The CCA governs almost every aspect of the University of Adelaide’s business. Its’ aim is to promote and protect healthy competition. Under the CCA, a wide range of “anti-competitive” conduct is prohibited and subject to heavy penalties.