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What the ACCC does
What the ACCC can't do
Businesses can generally set, raise and lower the prices they charge for the products and services they supply. Businesses decide the prices of their goods and services based on a variety of factors, including:
The prices for some goods and services can remain relatively stable over long periods. In other instances, prices for goods and services can change significantly on a regular basis due to these factors. If consumers or businesses think the prices another business is charging are too high, they can consider alternative suppliers, or consider not purchasing the product or service at all, where this is possible. Prices that people think are too high, or sudden increases in price, are not illegal. However, the business's behaviour around setting prices may be illegal if it harms competition in a certain way. It's also illegal for businesses to make false or misleading claims about prices, including the reason for any changes in prices. Case study of setting prices for bananasScenarioIn 2011, Cyclone Yasi destroyed the bulk of North Queensland’s banana crop when it passed through the area. Bananas were still available from other growers around the country. However, the reduced supply nationally forced up demand. This led to higher prices for bananas across the country as wholesalers and retailers were prepared to pay higher prices to make sure they could get supply of bananas given the significant shortages. The wholesalers and retailers then in turn passed on these higher costs to their customers. Relevant factorsThis is an example of normal commercial practice and is not illegal. However, the business's behaviour around setting prices may be illegal if it harms competition in a certain way. It's also illegal for businesses to make false or misleading claims about prices, including the reason for any changes in prices. Case study of setting prices in a football stadiumScenarioBusinesses such as football stadiums often enter into exclusive arrangements with a particular supplier to supply only their products at the venue. As people can’t bring other food or drinks into the venue, the business doesn't consider the price of the same food or drink items at other locations in setting its prices. It decides to set its prices higher than those charged for the same or similar items at nearby establishments. Relevant factorsThis is an example of normal commercial practice and is not illegal. However, the business's behaviour around setting prices may be illegal if it harms competition in a certain way. It's also illegal for businesses to make false or misleading claims about prices, including the reason for any changes in prices. People may consider the prices a business charges to be too high. This is sometimes referred to as ‘price gouging’ or ‘excessive pricing’. Sometimes businesses may respond to a sudden rise in demand or lack of supply with very large price increases. While it’s often seen as unfair, prices or price increases that people may think are too high are not illegal on their own. However, it's illegal for businesses to make false or misleading claims about prices, including the reason for price increases. Surge pricing is when businesses temporarily increase their prices during periods of high demand. For example, ride-share companies may increase their prices when there are many people wanting rides and not enough available drivers. Surge pricing is not illegal, but businesses must be clear about the price consumers will pay. They must also not make false or misleading claims about their prices. Although businesses are free to set their own prices, they must do so independently of other businesses. Some pricing behaviour is illegal because it harms competition, leading to less choice or higher prices for consumers. Price fixingPrice fixing happens when competitors agree on pricing instead of competing against each other. Price fixing is a form of cartel conduct and is always illegal. See Price fixing for more information. Minimum resale pricesSuppliers must not try to stop resellers selling goods or services below a minimum price. It’s also illegal for resellers to ask their suppliers to stop their competitors from discounting. See Minimum resale prices for more information. Predatory pricingIt’s usually legal for businesses to sell products below the cost price. However, if this is done in a way that substantially lessens competition, this is considered misuse of market power and is illegal. See Misuse of market power for more information. False or misleading claims Price displays Competition and anti-competitive conduct Which term is the goods and services that one produces domestically and sells abroad?Exports are goods and services that are produced in one country and sold to buyers in another. Exports, along with imports, make up international trade.
Is the practice of selling a product in foreign countries for a lower price than the good is sold in the producing country?What is dumping? Dumping is, in general, a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country.
When a country sells its products in a foreign country at a cheaper price than usual and sometimes even at a loss it is dumping products?3. Persistent dumping. When a country consistently sells products at a lower price in the foreign market than the local prices, it is called persistent dumping.
How does the World trade Organization WTO allow countries to determine whether dumping has occurred?How does the World Trade Organization (WTO) allow countries to determine whether dumping has occurred? The WTO allows countries to determine that dumping has occurred if a product is exported for a lower price than it sells for on the home market.
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