Telstra Corporation Limited - variation - s.87B undertaking

On 23 December 2022, the ACCC accepted an instrument that varies the section 87B undertaking given to the ACCC by Telstra Corporation Limited and NBN Co Limited and that incorporates Telstra Limited as a new party to the undertaking. The purpose of these changes is to ensure the continued application of the undertaking following changes to Telstra’s corporate structure.

These changes to the undertaking took effect from 1 January 2023.

The ACCC accepted a section 87B undertaking  from Telstra Corporation Limited and NBN Co Limited (the parties) on 27 February 2012 in relation to proposed variations pursuant to the substantial adverse events clause in the commercial arrangements between the parties (the Definitive Agreements).

The undertaking was given by the parties in order to mitigate concerns raised by the ACCC in relation to the arrangements between the parties in the context of its consideration of Telstra’s Structural Separation Undertaking. The ACCC considered that in the absence of the undertaking, variations could receive the benefit of legislative authorisation for the purposes of section 51(1)(a) of the Competition and Consumer Act 2010, due to the operation of section 577BA(3) of the Telecommunications Act 1997, without any regulatory review.

The objective of the undertaking is to address these concerns through the court enforceable undertakings made by the parties to:

(i)            not vary the Definitive Agreements pursuant to the substantial adverse events clause unless it has been accepted by the ACCC under a review process set out in the undertaking or if permitted to do so by a court; and

(ii)          comply with the process set out in the undertaking which provides for the ACCC review of all relevant variations.

The ACCC received notice, pursuant to clause 3.2 of the Undertaking, that the Subscriber Agreement became binding on the parties on 7 March 2012.

Further information regarding the undertaking can be found in the ACCC’s Assessment of Telstra’s Structural Separation and draft Migration Plan – Final Decision, available at http://www.accc.gov.au/content/index.phtml?itemId=1003999.