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 of BD and PI recognise that the best way to ensure the success of their businesses is to work together, rather than compete against each other. To this end, BD and PI form 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. BD and PI also 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. EPL relocates to Australia in July 2019. Whilst in Australia, EPL quickly becomes a serious rival to BD. BD is worried about EPL and BD contacts the largest purchaser of printer ink in Australia, Stationery Works Pty Ltd (SW). BD creates an agreement with SW in which BD pays SW $250,000 each year on the condition that SW not purchase printer ink from EPL. As a result of that agreement, EPLs sales drop and they are considering moving back to the United Kingdom. BD and PIs behaviour 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 the Competition and Consumer Act. When answering this question, discuss appropriate case law and advise the ACCC as to the extent and severity of any penalties available if a breach has occurred.