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Allan Fels and Matthew Lees

A major issue for competition law in Australia, and in other countries, is market dominance in the supermarket sector. This chapter gives an overview of the current status of the retail grocery industry in Australia, and considers a range of potential policy responses to the issue of market dominance: divestiture, merger law, price control, cartel laws, misuse of market power, unconscionable conduct, industry codes and other legal measures. Particular attention is given to the laws on misuse of market power (recently reformed) and unconscionable conduct (the subject of a significant recent case in the supermarket context). The chapter compares the strengths and weaknesses of the different policy responses. In short, the Australian position provides one model for addressing market power – with separate laws focussing on economic matters (misuse of market power) and fairness (unconscionable conduct), but both laws administered by the same regulator.