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Contrary to Fact: The Use And Abuse Of The Counterfactual Test in Section 46 of The Competition and Consumer Act

Ian B Stewart
(2015) 43 Australian Business Law Review 6



Section 46(1) of the Competition and Consumer Act 2010 (the Act) is a complex provision, and one of its difficult issues is whether a corporation took advantage of its substantial market power. The counterfactual test is used to answer this issue, yet its result is only relevant and cogent if the test is framed consistently with the language of s 46(1). After considering the concepts of competition, market power, and taking advantage of market power, the article examines how the counterfactual test should be applied, what assumptions it requires as to the nature of a competitive market, and whether a material distinction exists between the words “could” and “would” when the test is applied.



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