ACADEMICS AND legal practitioners are keeping their fingers crossed that the latest package of proposed amendments to section 46 will be the last.
The competition law community has been waiting patiently for post Boral developments in the courts. Unresolved issues impeding the court’s interpretation of the provisions include the definitions of cost, market share and predatory pricing.
Clayton Utz partner Michael Corrigan believes the government needs to stop tinkering with the section in order to allow it to “settle” in the courts.
“I think the Act has been amended many times in the last three to five years, and we really need to allow the thing to settle and allow some cases to be tested to work out whether it is getting results or not,” he said.
Corrigan said that, above all, it was time to put politics aside and allow the trade practices Act time to fulfil its pro-competitive policy purpose.
“I’m not a fan of this constant tinkering every year, because of some particular lobbying that goes on, to be adding new sections without even stopping to think whether the previous reforms may have delivered the results,” he said.
Dr Caron Beaton-Wells, Senior Lecturer Melbourne Law School, agreed that the courts need to be given the time and opportunity to consider the provisions of section 46 on the basis of some “real facts”.
“I think what we need to see is for the courts to have a further opportunity to explore the provision in the predatory pricing area. Boral is a case that had real problems for the ACCC from the outset. I don’t think Boral is a case that you’d point to, to say section 46 isn’t working. I think you need some further cases to gain a better informed view about that,” Beaton-Wells said.
“If anything, by virtue of having a specific section in there now dedicated to predatory pricing, it just highlights the fact that there are elements of such a claim that the ACCC has to prove that are highly contentious like recoupment.”
The latest amendment by the Assistant Treasurer and Minister for Competition Policy & Consumer Affairs, Chris Bowen, stipulates there should be no element of recoupment in a predatory pricing case in Australia.
Corrigan, however, argued against the striking out of the recoupment element, citing its inclusion in the definition of predatory pricing in overseas jurisdictions such as the United States.
“That’s his view,” Corrigan said in response to Bowen’s move, pointing to the High Court’s ruling in Boral as a confirmation of the importance of recoupment to a predatory pricing action. “Even Justice Kirby accepted it, and he was a dissenter. Kirby said that when you look at that, case recoupment is an important [even] if not essential part of any predatory pricing case. So the government’s gone against the Justice Kirby line as well as the majority, without any real satisfactory explanation.”
Dr Beaton-Wells also tabled criticism of the minister’s interpretation of the High Court’s past rulings, focussing on its interpretation of the test for ‘taking advantage’.
“Bowen, the minister, says in his speech that in Rural Press, the court endorsed a test which inquired whether the corporation could have undertaken the [anti-competitive] conduct without a relevant degree of market power, but … he’s just wrong about that: the court didn’t endorse that test.
“In my view, if you read from the first major decision in this area [which is] Queensland Wire, then you read Boral, Melways, and Rural Press: the real question is would the corporation have done the same as a matter of commercial reality in a competitive market?”
Despite the good intentions of the government in reversing the Birdsville amendment, it seems that the same old controversies and confusions will continue to dog section 46 in its new incarnation.