Collective bargaining

The collective bargaining process allows two or more competing businesses to negotiate a deal for the sale or purchase of products or services with a common customer or supplier.

In Australia, the Australian Consumer and Competition Commission (ACCC) regulates collective bargaining under the Trade Practices Act 1974 (Trade Practices Act). Although collective bargaining is likely to raise concerns under the Trade Practices Act, small businesses can apply to the ACCC for approval to collectively bargain with another business.

On January 1 2007, a new approval process called notification was introduced, which reduces the time and cost involved for small businesses seeking to collectively bargain.

The changes to the Trade Practice Act mean that small businesses:

• can use notification as an alternative process to authorisation to undertake collective bargaining
• can start bargaining in as little as 28 days compared with the previous 6 months
• pay less to lodge a notification, now costing only $1 000 as opposed to $7 500 for lodging an authorisation application.