Are discounts prohibited under the Act?

Discounts are a form of price competition and are generally to be encouraged. They often reflect the lower costs of supplying certain customers or groups of customers. They may, however, be prohibited under Sections 17 and 20 if they are anti-competitive – e.g. loyalty discounts which are conditional on the customer buying all or most of its supplies from the supplier. Of course, in these circumstances it would have to be proved that the practice is having or is likely to have the effect of substantial lessening of competition. In the case of Section 20, the supplier must be shown to hold a dominant market position.