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Latest Australian Competition Law News and Commentary
22 July 2016 - Government committed to effects test
Following the Productivity Commission's draft report on the regulation of agriculture, released, Thursday, Treasurer Scott Morrison has reinforced the Government's commitment to implementing the 'effects test' for misuse of market power, as recommended in the Harper Report. See Fluer Anderson, 'Morrison back Nationals over Productivity Commission on farm red tape' (AFR, 21 July 2016).
21 July 2016 - Merger approval day (Asciano approved; Metcash undertaking accepted)
The ACCC also announced this morning that it would not oppose Metcash's bid to acquire Home Timber & Hardware after accepting enforceable undertakings from Metcash's. See ACCC media release on Metcash. See Metcash/HTH merger register page. See ACCC's Q&A page on Metcash/HTH.
For commentary on the Asciano deal see, for example, James Thomson, 'ACCC approves Asciano takeover' (AFR, 21 July 2016) and David Palmer, 'ACCC green lights Qube and Brookfield's takeover of Asciano' (The Australian, 21 July 2016).
For commentary on the Metcash approval see, for example, Sarah Thompson, Anthony Macdonald and Joyce Moulakis, 'Metcash secures ACCC approval for Home Timber and Hardware Group' (AFR, 21 July 2016) and David Palmer, 'ACCC clears path for Metcash's hardware extension' (The Australian, 21 July 2016).
21 July 2016 - PC draft report on the regulation of agriculture released
The Productivity Commission today released its regulation of agriculture draft report. Comments on the report are due by 18 August. Chapter 11 deals with competition regulation. Briefly, the draft report concludes that:
'Competition is a key driver of innovation, productivity and competitiveness in agriculture. However, there are longstanding concerns about small farm businesses being subject to anticompetitive behaviour from dominant market players in the supply chain....' (p 28)
'The existing competition regulation and oversight is adequate for managing concerns about abuse of market power by supermarkets and traders engaging with farm businesses. The current focus on the potential for the misuse of market power by wholesale merchants and supermarkets engaging with farmers is not well supported by evidence.' (p 29)
'Suggestions to amend section 45 of the Competition and Consumer Act 2010 (Cwlth) are unlikely to increase the adoption of collective bargaining because they do not address significant economic disincentives and a cultural aversion in the agricultural sector to participating in cooperatives. Introducing an ‘effects’ test to section 46 of the Act is also unlikely to shield farm businesses from intense competition in retail food markets.' (p 29)
Notwithstanding these draft conclusions, Nationals Senator Fiona Nash has reinforced the Nationals' commitment to the introduction of (amongst other things) an effects test: see 'The bold new face of the National Party', RN Breakfast, 21 July 2016 and Jared Owens, 'Fiona Nash rejects Productivity Commission on foreign investment, regulations' (The Australian, 21 July 2016).
For media and commentary see, for example, Michelle Grattan, 'Productivity Commission attacks competition ‘effects test’ and farm foreign investment rules' (The Conversation, 21 July 2016), Phillip Coorey, 'Productivity Commission takes aim at rural protectionism' (AFR, 20 July 2016), Jacob Greber, 'Productivity Commission joins fight against 'effects test'' (AFR, 21 July 2016) and David Uren, 'No logic to red tape hobbling farms: Productivity Commission' (The Australian, 21 July 2016).
18 July 2016 - NYK Pleads Guilty to criminal cartel conduct
Nippon Yusen Kabushiki Kaisha today pleaded guilty to criminal cartel conduct in the Federal Court. This represents the first criminal cartel case in Australia since criminal penalties were introduced in 2009. See ACCC media release. See my NYK case page. See also hot topic - criminal cartel page.
17 July 2016 - First criminal cartel case launched
It appears we have our first criminal cartel case, with The Queen v Nippon Yusen Kabushiki Kaisha listed for a directions hearing before Justice Wigney at 10:15am on Monday. An indictment was filed by the Commonwealth Director of Public Prosecutions on Thursday, but further details are not yet known. The Australian reports that the ACCC is 'due to make public statements on the matter on Monday'. See further John Durie and Ben Butler, 'ACCC launches criminal cartel case against Japanese shipper NYK' (The Australian, 15 July 2016) and John Durie, 'ACCC bares teeth with criminal case against Japan's NYK' (The Australian, 16 July 2016).
Competition Policy Review (Harper)
The first major review of competition policy in Australia was conducted in 2014-2015 with the final report released on 31 March 2015. The Government has accepted many of the recommendations and draft legislation is expected later in 2016.
Misuse of market power
Always topical, the issue of misuse of market power featured prominently in the Harper Review, with the Panel recommending introduction of an effects test. In March 2016 the Government announced that it would introduce an effects test consistent with the Harper Panel's recommendation.
First criminal cartel case
On 14 July 2016 the Commonwealth Director of public prosecutions filed an indictment against Nippon Yusen Kabushiki Kaisha in the Federal Court of Australia. This represents the first case alleging a contravention of the criminal cartel laws introduced in Australia in 2009. NYK pleaded guilty to criminal cartel conduct on 18 July 2016.
Cartels and agency arrangements
The 2013 arguably inconsistent outcomes in the ANZ and Flight Centre cases in 2013 led to some uncertainty about the circumstances in which agents may be considered in competition with their principals for purposes of the cartel laws. The appeal decisions in both cases were handed down on 31 July 2015. The ACCC has been granted special leave to appeal the Flight Centre decision to the High Court.
Resale Price Maintenance
The decision in CFMEU cast doubt on the ability of the ACCC to negotiate 'agreed penalties' with respondents to proceedings under the CCA; on 9 December 2015 the High Court overturned this decision with the result that parties may continue to negotiate and submit agreed penalties to the Court.
Images copyright: Images in the Hot Topic section (left column): male runner on starting blocks courtesy of stockimages at FreeDigitalPhotos.net; gas pump filling nozzles courtesy of Rawich at FreeDigitalPhotos.net and price magnifier definition means promotions and savings courtesy of Stuart Miles at FreeDigitalPhotos.net.(right column): business man and stock graph report courtesy of watcharakun at FreeDigitalPhotos.net; vacations computer key courtesy of Stuart Miles (Image ID: 10091676) at FreeDigitalPhotos.net; handshaking courtesy of Photokanok at FreeDigitalPhotos.net,