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Latest Australian Competition Law News and Commentary

18 October 2017 - ACCC welcomes 'new era in competition law'

Following the passage of the Competition and Consumer Amendment (Competition Policy Review ) Bill 2017 (Harper Bill) the ACCC has issued a press release welcoming a 'new era in competition law.

The passage of this bill also means that the misuse of market power changes, which passed in August but were contingent on the passage of the Harper bill, will also come into operation.

ACCC Chairman, Rod Sims, stated:

'I am pleased to see these important reforms pass through the Parliament. The reforms to the misuse of market power prohibition and the new prohibition of anti-competitive concerted practices will improve our ability to target conduct harming the Australian economy.'

Chairman Sims also welcomes the reforms to merger authorisation and clearance, particularly topical in light of the Tabcorp authorisation sage.

The media release goes on to state that the ACCC has established a 'Substantial Lessening of Competition Unit (SLC Unit), which will be responsible for misuse of market power and concerted practices investigations and litigation within the ACCC' and that this unit will soon release Guidance on the MMP and concerted practices provisions (draft guidance on each has previously been released for comment).

View media release.

 

Australian Parliament18 October 2017 - House agrees to Senate Harper amendment

Well that was quick!

The House of Representatives this morning considered the Senate's amendment to the Competition and Consumer Amendment (Competition Policy Review ) Bill 2017 (Harper Bill) (removal of schedule 6 relating to secondary boycott penalties).

Senator Morrison moved that the amendment be passed moved that the amendment be agreed to. Dr Leigh spoke briefly, following which the motion was agreed.

The Harper bill has now passed both Houses.

 

Australian Parliament18 October 2017 - House to consider Harper bill this morning

The Competition and Consumer Amendment (Competition Policy Review ) Bill 2017 (Harper Bill) passed the Senate with amendment (removal of schedule 6 relating to secondary boycott penalties) on Monday.

It is listed as the first bill for consideration in the House this morning.

Mr Morrison moved that the amendment be passed.

 

Uber - taxi image17 October 2017 - The Uber economy and the role of competition law

Terrific seminar today, by Dr Victoria Daskalova on 'Regulating the New Self-Employed in the Uber Economy: What Role for Competition Law?'.

The seminar was jointly hosed by the Competition Law and Economics Network and the Centre for Employment and Labour Relations Law at the Melbourne Law School.

A copy of Victoria's paper (Regulating the New Self-Employed in the Uper Economy: What Role for EU Competition Law?) can be accessed at SSRN: https://ssrn.com/abstract=3009120.

 

The Senate16 October 2017 - Three competition bills before Parliament today

The Competition and Consumer Amendment (Competition Policy Review ) Bill 2017 (Harper Bill) was back in the Senate today and passed with the expected amendment to schedule 6 (removal of the increased penalties for secondary boycotts). It now returns to the House. The House received a message from the Senate this evening and it was moved that the amendment be considered at the next sitting.

Also up for debate in the Senate was the Government's Competition and Consumer Amendment (Abolition of Limited Merits Review) Bill 2017 which passed without amendments. A report on this Bill by the Senate was also tabled and recommended passage of the Bill. It has now passed both Houses.

Meanwhile in the House the Competition and Consumer Legislation Amendment (Small Business Access to Justice) Bill 2017 was read for a second time and debate adjourned.

 

 

Australian Parliament13 October 2017 - Competition bills back in Parliament next week

The Competition and Consumer Amendment (Competition Policy Review ) Bill 2017 (Harper Bill) will be back in the Senate Monday and is expected to pass. However, given debate in the House (which focussed almost exclusively on the secondary boycott changes) it is likely an amendment will be proposed to schedule 6. This schedule proposes to increase the penalties for secondary boycotts significantly in order to align the penalty with other breaches of the competition laws. Any such a amendment has a good chance of succeeding in the Senate; there appears to be bipartisan support for the rest of the bill.

Also up for debate when Parliament resumes is the Competition and Consumer Legislation Amendment (Small Business Access to Justice) Bill 2017 (Private members bill) which passed the Senate on 13 August 2017; on Monday it will come befor ethe House for debate at around 10:30am.

 

13 October 2017 - ACCC proposes to allow joing purchasing of energy by Eastern Energy Buyers Group members

The ACCC has issued a 'draft determination proposing to allow businesses in the new Eastern Energy Buyers Group (EEBG) to run joint tender processes for electricity and gas' for a period of 11 years. The proposed joint tender process covers electricity, gas and gas transport services.

See ACCC media release.

See authorisation register.

 

12 October 2017 - Competition in the Australian economy: too little of a good thing

The recording of last week's Grattan Institute's Policy Pitch event, featuring Prof Caron Beaton-Wells and Dr Stephen King, with Jim Minifie as moderator, is now available.

The panel discussion included consideration of the following questions (and more):

  • 'How valid are concerns about competition and market power in Australia?
  • Where is competition working less well than it could, and what are its limits as a policy tool?
  • What else should policymakers do to ensure competition benefits the community?'

View Vimeo page: Competition in the Australian economy: too little of a good thing? – Melbourne from Grattan Institute on Vimeo.

 

11 October 2017 - Reasons published in Cement Australia penalty appeal

The reasons for judgment have been published in relation to the ACCC's appeal against penalty in the Cement Australia case.

The reasons can be found on the Federal Court page. Although the appeal related only to penalty, the reasons for judgment run to 226 pages (633 paragraphs)

The trial judge had imposed penalties of $17.1m; this has been increased to a total of $20.6m. The ACCC had sought an increase to a fine of more than $90 million.

See also my case page (Cement Australia).

 

 

7 October 2017 - Sims on media mergers

In an interview with the AFR on the recent media reforms, ACCC Chairman, Rod Sims, has noted the complications asssociated with the growth of online news.

The focus of any merger review would be the 'closeness of competition', with Sims describing markets as 'like a cascading series of concentric circles'.

See Max Mason, 'Media mergers not clear-cut in world of online competition: ACCC box Rod Sims' (AFR, 6 October 2017).

 

7 October 2017 - ACCC wants more information on Esso-BHP drop in gas output

ACCC Chairman, Rod Sims, has indictated the ACCC will be looking into Esso and BHP's drop in gas output from its Bass Straight joint venture.

See Peter Hannam, '"Held to ransom": Esso-BHP gas production drop to be examined by ACCC' (SMH, 7 October 2017)

See also Angela Macdonald-Smith, 'AGL Energy in the firing line again as ACCC widens crackdown on gas' (AFR, 5 October 2017)

 

5 October 2017 - $20.6 million penalties ordered against Cement Australia companies for anti-competitive conduct

The full Federal Court has upheld an appeal by the ACCC for increased penalties in the Concrete Australia case.

The trial judge had imposed penalties of $17.1m; this has been increased to a total of $20.6m. The ACCC had sought an increase to a fine of more than $90 million.

ACCC Chairman, Rod Sims, stressed the importance of high penalties in deterring anti-competitive conduct and announced the ACCC would 'continue to make submissions to the courts for higher penalties to be imposed for anti-competitive conduct'.

The ACCC first brought this case in 2008; it took until 2014 for an initial decision and a further 2+ years for a penalty decision. The appeal against penalty was filed in June 2016 and heard in February this year.

See ACCC media release (Cement Australia).

See my case page (Cement Australia).

See also John Durie, 'ACCC falls short in abuse of market power test case' (The Australian, 5 October 2017)

 

Image of horse race5 October 2017 - Tabcorp re-applies for authorisation: timelines set

Tabcorp formally re-applied for authorisation to acquire Tatts on Friday. The application is now available on the Tribunal website (it usefully appears as a marked up version of the original).

Directions hearings were held by Justice Middleton on Monday and Tuesday. The following timelines were established:

  • Friday 6 October: parties and interveners to serve any new evidence arising since 2 June
  • Monday 9 October: submissions and supporting materials by third parties due
  • Friday 13 October: the ACCC to file a report pursuant to s 95AZEA and any further evidence
  • Tuesday 17 October: replies to be submitted
  • Friday 20 October: other written submissions due
  • Monday 23 October: other written replies due
  • Tuesday 24 - Wednesday 25 October: hearing (if needed)

Justice Middleton also granted Tatts, CrownBet, the Racing Victoria Interveners and Racing.com leave to intervene, ordered that the evidence filed in the first Tabcorp application would stand as evidence in the new application and ordered that third party submissions filed in that proceeding would stand as submissions in the new proceedings (subject to the parties withdrawing the submissions). Rules regarding confidentiality were also established.

See Application by Tabcorp Holdings Limited (No 2) (ACT 3 of 2017)

See also Application by Tabcorp Holdings Limited (ACT 1 of 2017)

See also my Tabcorp merger page for further details.

 

petrol pumps4 October 2017 - ACCC delays ruling on BP's proposed acquisition of Woolworths' retail service stations

The ACCC has pushed back the date for its anticipated final determination in the BP from 26 October until 30 November.

The ACCC issued a statement of issues on 10 August. Today it pushed back the proposed announcement date in order to 'allow more time for data analysis, and to consider information provided by parties and market participants.'

See Samantha Woodhill, 'ACCC delays final ruling on BP, Woolworths deal' (The Australian, 4 October 2017)

See ACCC Merger Register (BP).

 

Cows
3 October 2017 - Dairy Inquiry reporting date pushed back

The date for final reporting of the ACCC's inquiry into competitiveness of prices, trading practices and supply chain in the Australian dairy industry has been pushed back by five months. The interim report is now expected to be released in November and final report is due 30 April 2018.

See, John Chanter, 'ACCC delays final report into dairy industry until April 30' (The Border Mail, 5 October 2017).

See ACCC Dairy Inquiry page

 

Cinema28 September 2017 - ACCC proposes to authorise independent cinemas to collectively bargain

The ACCC 'has issued a draft determination proposing to grant authorisation to Independent Cinemas Australia (ICA), and its current and future independent cinema members, to share information and collectively bargain with film distributors.'

Interested parties can make submissions until 20 October, with a final determination expected in December.

See ACCC media release.

See authorisation register.

 

Image of truck28 September 2017 - ACCC proposes to authorise TWU owner drivers to collectively bargain

The ACCC 'proposes to grant authorisation, for five years, to the Transport Workers Union of Australia SA/NT Branch' to enable owner drivers contracted to Toll 'in metropolitan Adelaide, and in Whyalla, to engage in voluntary collective bargaining with Toll.' A final decision is expected in November. Submissions on the draft determination can be made until 13 October.

See ACCC update. See authorisation register (Adelaide). See authorisation register (Whyalla).

 

Image of medication28 September 2017 - ACCC re-authorises eRx Script Exchange revenue sharing agreement

The ACCC has dissed a final determination 'granting authorisation to eRx Script Exchange Pty Ltd to continue to give effect to an interoperability arrangement that involves revenue sharing with IP MDS Pty Ltd until 30 June 2020.'

This is consistent with a draft determination issued in August.

See ACCC update. See authorisation register.

 

Image of building blocks spelling word 'child'27 September 2017 - Camp Australia withdraws merger clearance application

Camp Australia and Junior Adventures Group have withdrawn their request for ACCC merger clearance.

ACCC commenced its informal review on 1 June 201 and later released a statement of issues expressing some competition concerns.

See ACCC media release.

See merger register.

See also Bridget Carter, 'Merger plans for outside school care groups dropped' (The Australian, 27 September 2017)

 

Horse race - back at the starting gates

26 September 2017 - Justice Middleton orders rehearing of Tabcorp/Tatts merger authorisation application

Justice Middleton, President of the Australian Competition Tribunal, today ordered a rehearing of Tabcorp's application for authorisation on 24-25 October.

Last week the full Federal Court sent the matter back to the Tribunal after upholding one of the ACCC's judicial review claims.

Authorisation applications must be decided within six months (or the Tribunal will be taken to have refused authorisation pursuant to s 95AZI). As six month has passed since Tabcorp applied for authorisation (on 13 March) there was doubt about whether the Tribunal still had jurisdiction to consider the matter. The Australian's Ben Butler reports that, although Justice Middleton considered the Tribunal did have that power, he nevertheless suggested Tabcorp make fresh application to avoid subsequent challenge.

See Ben Butler, 'Tabcorp-Tatts tie-up gets inside running as timetable thrown into disarray' (The Australian, 26 September 2017). See also Nick Toscano, 'Tatts set to scrap mega-merger shareholder vote' (SMH, 26 September 2017).

See my Tabcorp page for further details.

 

Image of horse race26 September 2017 - ACCC seeks fresh hearing in Tabcorp/Tatts merger

The ACCC is seeking a fresh hearing for the Tabcorp/Tatts merger proposal.

As a result of the judical review application, more than six months (the maximum statutory limit for authorisation applications) has passed since Tabcorp applied for authorisation (on 13 March). This has raised the issue of whether or not the Tribunal still has jurisdiction to consider the matter. The ACCC has argued that because of this doubt a further application should be made to avoid any potential future dispute.

See Ben Butler, 'ACCC seeks new hearing on Tabcorp-Tatts merger' (The Australian, 26 September 2017). See also Bridget Carter and Scott Murdoch, 'Lawyers sweat on gaming merger as value evaporates' (The Australian, 26 September 2017).

The matter was listed for a directions hearing this morning.

See my Tabcorp page for further details.

 

Image of broken egg25 September 2017 - ACCC loses Australian Egg Corporation appeal

The Full Federal Court today unanimously dismissed the ACCC's appeal in its case against Australian Egg Corporation Ltd (AECL) and others. It had alleged AECL had attempted to induce egg producers to enter into a cartel arrangement to reduce the supply of eggs at an 'Egg Oversupply Crisis Meeting'.

ACCC Chairman, Rod Sims, has said that the outcome 'highlights the importance of the Federal Government's Competition Policy Reform Bill, which introduces a concerted practices prohibition ...'

The ACCC has indicated it will 'carefully consider' the judgment.

View ACCC media release. View the judgment. View my case page for further links and media as it emerges.

 

Image of two heads at library25 September 2017 - Grattan Institute event in Melbourne next week: Competition in the Australian economy: too little of a good thing

The Grattan Institute is holding a Policy Pitch event on 3 October, featuring Prof Caron Beaton-Wells and Dr Stephen King, with Jim Minifie as moderator. The panel discussion will include consideration of the following questions:

  • 'How valid are concerns about competition and market power in Australia?
  • Where is competition working less well than it could, and what are its limits as a policy tool?
  • What else should policymakers do to ensure competition benefits the community?'

The event will be held on 3 October at the State Library from 6-7:15pm; it is free to register.

For details and to register visit the Grattan Institute event page.

 

Image of moving boxes25 September 2017 - ACCC moves offices in Melbourne

The ACCC's Melbourne office has begun relocating from 360 Elizabeth Street to 2 Lonsdale St (level 17). There will be staff at both offices until 2pm on 6 October.

See 'ACCC Melbourne office is moving to Lonsdale St' (ACCC Update, 22 September 2017)

 

23 September 2017 - Michael Schaper to stand down as small business commissioner next year

Michael Schaper, the ACCC's Small Business Commissioner, will step down from the role in 2018 after nine years in the position.

John Durie takes a look at quick look at the role: John Durie, 'Michael Schaper, the champion of small business, to step down' (The Australian, 23 September 2017)

 

Image of horse racing22 September 2017 - Reasons for decision out in Tabcorp

The reasons for judgment have been released in the Tabcorp/Tatts judicial review matter - sooner than expected.

Of the ACCC's three grounds of judicial review only the first succeeded: the Court concluded the Tribunal erred in not considering detriments other than the detriment of substantially lessening competition.

For details of the grounds of appeal and the Court's finding see my blog:

For the full reasons see ACCC v Australian Competition Tribunal [2017] FCAFC 150 (Jade) (or at AustLII)

For media see, for example Damon Kitney, 'ACCC "won't be rushed on Tatts"' (The Australian, 22 September 2017), Nick Toscano, 'Tabcorp, Tatts confident of merger despite dangers of longer delay' (SMH, 22 September 2017), John Stenshold, 'Tabcorp Tatts deal faces further delays' (AFR, 21 September 2017), John Durie, 'Tabcorp-Tatts tie-up hits fresh hurdle as doubts loom over tribunal’s jurisidiction' (The Australian, 22 September 2017)

See also my Tatts/Tabcorp merger page.

 

Image of facebook22 September 2017 - Sims: Merit in studying implications of tech giants

As part of a deal to get media laws through the Senate, Treasurer Scott Morrison agreed to have the ACCC conduct an inquiry into Google and Facebook (and other internet giants).

Although terms of reference have not yet been sent to the ACCC, ACCC Chairman Rod Sims, in an interview to Austrlaian Politics Live podcast, stated that he considered it 'perfectly appropriate' to give 'serious thought' to the implications of the dominant tech giants on the way in which 'journalism has been traditionally funded'.

See Katharine Murphy, 'ACCC chief backs inquiry into tech giants' market dominance' (The Guardian, 22 September 2017).

 

20 September 2017 - Judgment on Tabcorp merger: back to the Tribunal

The Full Federal Court (comprising Justice Besanko, Justice Perram and Justice Robertson) handed down its judgment on the appeals by ACCC and Crownbet against the decision of the Australian Competition Tribunal in relation to the Tatts/Tabcorp merger authorisation.

The appeal was successful and the Court has sent the matter back to the Australian Competition Tribunal for review. Reasons for judgment have been embargoed for the next five days.

See Scott Murdoch, 'Tabcorp merger with Tatts sent back to Australian Competition Tribunal' (The Australian, 20 September 2017) and Scott Murdoch, 'Tabcorp, Tatts merger hits hurdle' (The Australian, 20 September 2017). See also Nick Toscano, 'Tabcorp and Tatts merger derailed in Federal Court' (SMH, 20 September 2017).

The ACCC has issued a media release indicating it is 'pleased that the Full Federal Court has set aside the decision'.

See further

 

20 September 2017 - ACCC conducting local market screening re: BP's proposed acquisition of Woolworths' retail service station sites

The ACCC has published a Local market screening letter inviting submissions from interested parties by 28 September 2017.

The ACCC issued a Statement of Issues outlining preliminary competition concerns on 10 August 2017. The proposed day for the announcement of the ACCC's findings is 26 October 2017.

See ACCC merger register.

See also Sue Mitchell, 'BP, Woolworths fuel deal under spotlight' (AFR, 19 September 2017)

 

Image of electrical storm20 September 2017 - Sims's speech to National Press Club on energy affordability

ACCC Chairman, Rod Sims, address the National Press Club at lunchtime today on the issue of gas and electricity affordability.

The speech is now available:

 

Image of gaval20 September 2017 - Tabcorp listed for judgment in Federal Court today

The Federal Court Registry lists the ACCC and Crownbet appeals against the decision of the Austrlaian Competiton Tribunal for judgment at 2:15pm today.

The matter was heard by Justice Besanko, Justice Perram and Justice Robertson.

See further

 

Image of electrical storm20 September 2017 - Sims to address National Press Club on energy affordability today

ACCC Chairman, Rod Sims, will address the National Press Club at lunchtime today. His topic: 'Shining a light: Australia's gas and electricity affordability problem'.

For some media ahead of the speech, see:

 

20 September 2017 - ACCC wants four pillars bank policy reviewed

In a submission to the Productivity Commission's Inquiry into the Australian Financial System, the ACCC has suggested that the PC consider the impact of the four pillars policy on competition (para 3.2). The policy prevents mergers between the four major banks. The submission states, in part:

... the “four pillars” policy provides clarity and certainty that any mergers between the large banks would not be permitted. In that sense, the policy reflects a decision by the government to prevent further consolidation in an otherwise concentrated market rather than leaving this decision potentially with the Court, should a merger be challenged on competition grounds.

Conversely, it could be argued that the policy insulates the large banks from competition. Arguably the effect of the “four pillars” policy in addition to the implicit guarantee and prudential measures entrenches the large banks’ strong position in relevant markets and reinforces their “too big to fail” status. Whether this limits the ability of new entrants and smaller banks to constrain the large banks is a question we consider warrants further consideration. ...

The ACCC indicates it has not formed a final view on the issue. Its submission sets out in more detail the divergent views about the policy. The submission also sets out a number of initiatives the ACCC considers may reduce barriers to competition in retail banking, including reducing restrictions on the use of the term 'bank'.

See further:

 

Image of time - rushing14 September 2017 - Looks like October for the Harper Bill

The Competition and Consumer Amendment (Competition Policy Review ) Bill 2017 (Harper Bill) was back on the Senate Red today, but further lengthy debate on Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017 (which eventually passed around 4:30pm) means the Senate is not likely to get to it today (update: it didn't make it ... October it is).

The Senate does not sit again until mid-October.

See, eg, John Durie, 'Parliamentary delay keeps competition reform at bay' (The Australian, 14 September 2017).

 

Image of generic power station14 September 2017 - Sims: AGL's ownership of Liddell and Bayswater anticompetitive

In an interview with the Australian Financial Review, ACCC Chairman, Rod Sims, described AGL's ownership of the Liddell and Bayswater powerplants as anticompetitive.

Sims points to the ACCC's opposition to AGL's deal to buy MacGen from the NSW government, which was approved by the Australian Competition Tribunal in 2014 after the ACCC refuse to grant informal clearance. Sims told the AFR that the ACCC thinks the merger 'is having an effect on increasing power prices right now'.

See Angela Macdonald-Smith, 'AGL Energy's Liddell ownership 'anti-competitive': Sims' (AFR, 13 September 2017)

See also 'ACCC sys AGL behaviour 'anti-competitive' (Sky News, 14 September 2017) (includes video)

 

14 September 2017 - ACCC to investigate Google and Facebook

Image of facebookImage of Google Chrome

As part of a deal to get media laws through the Senate, Treasurer Scott Morrison has agreed to have the ACCC conduct an inquiry into Google and Facebook (and other internet giants).

This follows Senator Xenophon (whose vote was crucial to the Govt) expressing concerns that Google and Facebook were 'hoovering up' billions in advertising revenue.

See,e g, Bevan Shield and Lucy Battersby, 'Media reforms to pass the Senate, clearing the way for major mergers and acquisitions' (SMH, 14 September 2017), Kylar Loussikian and Sharri Markson, 'Media Reforms: Senate Inks Deals on Critical Media Shake-Up' (Daily Telegraph, 14 September 2017), AAP, 'Media reforms set to pass Senate' (SkyNews, 14 September 2017), Darren Davidson, 'Fifield close to media reform breakthrough with crossbench' (The Australian, 11 September 2017).

See also Stephanie Dalzell, 'Media laws package to pass after Xenophon deal' (ABC Radio, AM with Sabra Lane, 14 September 2017).

 

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