Black Dot Pty Ltd (BD) is the largest company in Australia that sells printer ink, holding 45% of the market share. Premium Ink Pty Ltd (PI) is the second largest company in Australia that sells printer ink, holding 40% of the market share.

The directors ofBDandPIrecognise that the best way to ensure the success of their businesses is to work together, rather than compete against each other.

To this end,BDandPIform an agreement in which they agree to raise prices by 3% each year for a period of 10 years. Under the agreement, neither company is allowed to encourage large corporate retailers from purchasing printer ink from their company as opposed to the other. In the event that a retailer switches companies, the original company was required to compensate the other company according to the agreement.BDandPIalso agreed to charge higher prices for smaller corporate retailers, in order to maintain their dominance in the market.

Experion Pty Ltd(EPL)is an overseas company that sells printer ink in the United Kingdom.EPLrelocates to Australia in July 2019. Whilst in Australia,EPLquickly becomes a serious rival toBD.

BDis worried aboutEPLandBDcontacts the largest purchaser of printer ink in Australia, Stationery Works Pty Ltd (SW).BDcreates an agreement withSWin whichBDpaysSW$250,000 each year on the condition thatSWnot purchase printer ink fromEPL. As a result of that agreement,EPL'ssales drop and they are considering moving back to the United Kingdom.

BDandPI'sbehaviour has come to the attention of the Australian Competition and Consumer Commission (ACCC).

Advise the ACCC as to whether BD and PI has breached any provisions in theCompetition and Consumer Act. When answering this question, discuss appropriate case law and advise the ACCC as to the extent and severity of anypenaltiesavailable if a breach has occurred.

You must useILAC Templateto answer this question.