Taprobane Tours WA Pty Ltd (Taprobane) was a wholesale travel agent, including operating as a wholesaler of tours to the Maldive Islands from 1984-1987. The air component of the tours was provided by Singapore Airlines, which later also conducted its own in-house sales for these destinations and began to restrict wholesaling of Maldive services by Taprobane and increase prices for supply of its services to Taprobane. Taprobane alleged this constituted an abuse of market power contrary to s 46 of the TPA and instituted proceedings for damages.

Taprobane succeeded at first instance and was awarded $14,000 damages.

Singapore Airlines appealed the decision. The appeal was allowed on the threshold question of market definition. The Court also noted there did not appear to be any anti-competitive purpose. The leading judgment was delivered by Justice French, with Spender and O'Loughlin JJ agreeing with the reasons provided by Justice French.

Taprobane Tours WA Pty Ltd (Taprobane) was a wholesale travel agent, including operating as a wholesaler of tours to the Maldive Islands from 1984-1987. The air component of the tours was provided by Singapore Airlines, which later also conducted its own in-house sales for these destinations and began to restrict wholesaling of Maldive services by Taprobane and increase prices for supply of its services to Taprobane. Taprobane alleged this constituted an abuse of market power contrary to s 46 of the TPA and instituted proceedings for damages.

Taprobane was successful. The trial judge held that the relevant market was the 'market for the supply of airline services to persons engaged in providing wholesale tours to the Maldives' (para 2 of the judgment of Justice Spender on appeal)

• Re Taprobane Tours WA Pty Ltd v Singapore Airlines Limited [1990] FCA 325; 96 ALR 405 (30 August 1990)

Agreed with Justice French

Further details forthcoming

Definition of the product dimension of the market was critical in this case (para 53). On the issue of the role of the market in competition law, his Honour said (at 174 (para 36)):

In competition law it has a descriptive and a purposive role. It involves fact-finding together with evaluative and purposive selection. In any given application it describes a range of economic activities defined by reference to particular economic functions (eg manufacturing, wholesale or retail sales), the class or classes of products, be they goods or services, which are the subject of those activities and the geographic area within which those activities occur. In its statutory setting the market designation imposes, on the activities which it encompasses, limits set by the law for the protection of competition. It involves a choice of the relevant range of activity by reference to economic and commercial realities and the policy of the statute. To the extent that it must serve statutory policy, the identification will be evaluative and purposive as well as descriptive.

In relation to the functional dimension of the market, his Honour said (at 182 (para 52)):

At the functional level it would be possible to limit the market to the supply of services by airlines to wholesalers. Such a limitation, however, seems unduly restrictive. The integration of wholesale and retail activities within Singapore Airlines and other agencies suggests that the appropriate functional level comprehends the supply of airline services to wholesalers, packaged tours by wholesalers to retailers and packaged tours by retailers to consumers. The exercise of market power at either of the two upstream functional levels is closely connected with and capable of affecting competition downstream in the chain identified.

Agreed with Justice French

Click here for full case at AustLII