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Latest Australian Competition Law News and Commentary

Easter eggs

14 December 2018 - The Economics of Privacy Regulation

In the final Competition Law and Economics Network seminar for 2018 Dr Elif Kiesow Cortez spoke on the economics of privacy regulation - a terrific seminar on an increasingly important topic.

See CLEN discussion group page

To join the mailing list for CLEN events or or make any suggestions for topics the group might discuss at future events, please send your name and affiliation to the CLEN Centre Administrator.

 

Google

13 December 2018 - ACCC looking into Google v Unlockd

It is being reported that the ACCC is investigating if Google's restriction on Unlockd breached competition laws. Although the ACCC is not commenting, this is being inferred from references in the Digital Platforms Preliminary Report which describes several cases under investigation, including 'whether access restrictions imposed by a digital platform on a third-party app developer may raise issues under section 46 ...' (page 18)

In June Unlockd sued Google alleging anticompetitive and unconscionable behaviour involving threats to block its app (see Misa Han, 'Unlockd will 'cease to exist' if Google blocks the app' (AFR, 3 June 2018) and Cat Fredenburgh 'Unlockd wins bid to stop Google blocking app in Australia' (Lawyerly, 31 May 2018)). The case was discontinued on 31 October (Colin Kruger, 'Start-up Unlockd puts off legal action in Australia against Google' (SMH, 31 October 2018)).

See:

 

Mobile phone

13 December 2018 - ACCC raises preliminary concerns about proposed TPG/Vodafone merger

The ACCC has released issued a statement of issues in relation to the proposed TPG Telecom/Vodafone Hutchinson Australia merger. Chairman Rod Sims said:

[We] have preliminary concerns that removing TPG as a new independent competitor with its own network, in what is a concentrated market for mobile services, would be likely to result in a substantial lessening of competition. If TPG remains separate from Vodafone, it appears likely to need to continue to adopt an aggressive pricing strategy, offering cheap mobile plans with large data allowances.

Our preliminary view is the merged TPG-Vodafone would not have the incentive to operate in the same way, and competition in the market would be reduced as a result. A mobile market with three major players rather than four is likely to lead to higher prices and less innovative plans for mobile customers

See TPG/Vodafone media release

See TPG/Vodafone statement of issues.

 

Fixed line phone

12 December 2018 - Inquiry into access conditions for Telstra's regulated fixed line services

The ACCC has commenced an inquiry into making final access determinations for Telstra's fixed line services and wholesale ADSL.

Submissions can be made as part of a preliminary consultation on the ACCC's consultation hub until 25 January 2018. Further submissions and other inquiries can be made until 31 March 2018

See media release.

View Fixed line services FAD inquiry 2018 home page

 

House and money representing mortgage

11 December 2018 - More transparency needed in residential mortgage pricing

The ACCC has released the final report in its Residential Mortgage Price inquiry, finding that opaque and discretionary pricing by banks 'makes it difficult and time consuming for borrowers to shop around and stifles price competition'.

See media release,

See report.

 

Shipping containers

10 December 2018 - ACCC commences proceedings against NSW Ports

The ACCC has instituted Federal Court proceedings against NSW Ports Operations Hold Co Pty Ltd and two of its subsidiaries alleging they made agreements with the State of NSW having an anti-competitive purpose and effect.

ACCC Chairman, Rod Sims:

We are alleging that making these agreements containing provisions which would effectively compensate Port Kembla and Port Botany if the Port of Newcastle developed a container terminal, is anti-competitive and illegal.

...

The compensation and reimbursement provisions effectively mean that the Port of Newcastle would be financially punished for sending or receiving container cargo above a minimal level if Port Botany and Port Kembla have spare capacity. This makes development of a container terminal at the Port of Newcastle uneconomic ...

We are taking legal action to remove a barrier to competition in an important market, the supply of port services, which has significant implications for the cost of goods across the economy, not just in New South Wales. The impact of any lessening of competition is ultimately borne by consumers.

...

I have long voiced concerns about the short-term thinking of state governments when privatising assets and making decisions primarily to boost sales proceeds, at the expense of creating a long-term competitive market ... These anti-competitive decisions ultimately cost consumers in those states and impact the wider economy in the long term.

View media release.

See, eg, Michael Parris, 'ACCC takes Port Botany, Port Kembla to court over ‘illegal’ container agreement with NSW government' (The Herald, 10 December 2018).

 

Digital platform icons

10 December 2018 - Digital Platforms preliminary report released

One week after it was sent to the Government the ACCC has published its preliminary Digital Platforms report.

View media release and preliminary report (375 pages). For more detail and links to news media see my separate digital platforms inquiry page.

The media release states, in part:

'The report found that key digital platforms, Google and Facebook, had both the ability and incentive to favour related businesses or those businesses with which they may have an existing commercial relationship. The platforms’ algorithms rank and display advertising and news content in a way that lacks transparency to advertisers and news organisations.

"Organisations like Google and Facebook are more than mere distributors or pure intermediaries in the supply of news in Australia; they increasingly perform similar functions as media businesses like selecting, curating and ranking content. Yet, digital platforms face less regulation than many media businesses," Mr Sims said.

"The ACCC considers that the strong market position of digital platforms like Google and Facebook justifies a greater level of regulatory oversight," Mr Sims said.

"Australian law does not prohibit a business from possessing significant market power or using its efficiencies or skills to ‘out compete’ its rivals. But when their dominant position is at risk of creating competitive or consumer harm, governments should stay ahead of the game and act to protect consumers and businesses through regulation."'

The ACCC has also published some commissioned research (consumer surveys and a 175 page report on the Impact of Digital Platforms on News and Journalistic Content prepared by the Centre for Media Transition)

A media conference will be held at 12:30 and livestreamed here and here.

 

Digital platform icons

3 December 2018 - Digital Platforms draft report expected this week

The ACCC was scheduled to submit its draft report on its Inquiry into Digital Platforms to the Government today. We now await the public release ...

See, eg, John McDuling, 'It's crunch time for tech giants, as ACCC probe enters home stretch' (SMH, 3 December 2018), Anne Davies, 'World watches as Australian regulator rules on Facebook and Google' (The Guardian, 3 December 2018) and Lilly Vitorovitch, 'ACCC signs off on probe of tech giants' platforms' (The Australian, 3 December 2018, p 26).

 

ABLR

29 November 2018 - Terceiro to take over as General Editor of ABLR

Thomson Reuters has announced that Michael Terceiro will take on the role of General Editor of the Australian Business Law Review. Michael takes over from the late Prof Bob Baxt, who was founding editor of the journal.

On his Competition and Consumer Protection Law blog, Michael says he's excited to be takeng over the role and will aim to 'continue the high standards which Bob set for the ABLR'.

 

Businessman running

29 November 2018 - Yazaki take away: run, don't walk, for leniency

NZ competition and regulation economist, Donal Curtin, has posted his thoughts on the Yazaki penalty on his Economics New Zealand blog. Among other things, his advise to those in a cartel (or who discover they're in one) is:

... do not walk, do not amble, do not pause to think you're well hidden in the undergrowth and they'll never find you, RUN for the protection of the cartel leniency programme.

 

Shopping

29 November 2018 - Sims: Competition law should remain focused on consumer welfare

In a keynote address delivered to the RBB Economics Annual Conference in Sydney today, ACCC Chair Rod Sims defended the consumer welfare standard, stating that competition law and policy 'should be first and foremost about protecting and promoting competition for the welfare of consumers' and while this might achieve other objectives, like income distribution, these broader public interest considerations should not be introduced into the core of competition law enforcement.

'I want to be clear that I am opposed to introducing broader public interest considerations into the core of competition law enforcement.

... this renewed questioning of the economic foundation of competition law has led to calls to expand the range of considerations in competition law, to include both broader economic considerations (such as income inequality, low wage growth, or unemployment) and non-economic considerations (such as concentrations of political power, financial stability, media diversity, or environmental protection).

In my view, it is inadvisable and counterproductive to import these considerations into the core of competition law. Competition law is enforced by an independent authority, not by elected officials, so the objectives must be clear. Competition law and policy should be first and foremost about protecting and promoting competition for the welfare of consumers.'

See ACCC media release.

See full transcript.

 

Rubbish bins

29 November 2018 - ACCC raises concerns over Bingo's proposed acquisition of Dial-a-Dump

The ACCC has issued a Statement of Issues outlining preliminary competition concerns relating to Bingo's proposed acquisition of Dial-a Dump ...

See ACCC media release.

See merger register.

 

Senate

27 November 2018 - Debate on bill to repeal s 51(3) delayed

The Treasury Laws Amendment (2018 Measures No. 5) Bill 2018 which, if passed, will repeal subsection 51(3) (competition law exemption for certain licencing and or assignment of IP rights) was originally scheduled for debate in the Senate today. However, it dropped off the daily Red and was not debated.

Let's see what happens tomorrow ...

Update: nothing on today's (Wednesday's) Red either.

 

IP protection

23 November 2018 - Senate to debate bill to repeal s 51(3) next week

The Treasury Laws Amendment (2018 Measures No. 5) Bill 2018 is scheduled for debate in the Senate on Tuesday next week.

The bill, which passed the House of Representatives on 17 October and was introduced to the Senate the following day, will 'remove the exemption for conditional licensing or assignment of IP rights such as patents, registered designs, copyright or eligible circuit layout rights from prohibitions on restrictive trade practices'. It will do this by repealing subsection 51(3).

Senate week ahead

 

Abuse of Power Australia and Canada - flags

23 November 2018 - Misuse of Marker Power paper by Dr Katharine Kemp now available online

Dr Katherine Kemp's paper, 'Misuse of Market Power in Australia and Abuse of Dominance in Canada: Two Legislated Effects Tests for Unilateral Conduct' which appeared in volume 26 of the Australian Journal of Competition and Consumer Law earlier this year, is now available online at SSRN.

Earlier this year Katherine also published Misuse of Market Power: Reform and Rationale (CUP) - a must read for Australian practitioners.

 

Rubbish truck

23 November 2018 - ACCC authorises SA councils' joint waste tenders

The ACCC has granted authorisation to 'four Adelaide councils to jointly procure certain waste management services.' The councils and a council-owned precurement body are authorised:

  • 'to supply waste processing and disposal services for recyclables, organics and residual waste, and
  • to supply collection services for bulk bins, hard waste and street litter.

This follows a proposal to approve on 14 September. The ACCC considers that the joint tender process will encourage more competition from suppliers than separate tenders and is likelyt o create efficiencies that should be passed on to local residents. The ACCC did not consider it likely that the joint tenders would reduce competition in the long run. The ACCC has previously authorised other similar proposals.

See

 

Electricity lines

21 November 2018 - ACCC releases discussion paper on electricity monitoring

The ACCC has released a discussion paper relating to how it will conduct its new role of monitoring and reporting on supply of electricity in the National Electricity Market. Submissions are sought on three key areas:

  • 'the analytical framework for this role, including our expectations of market outcomes and participant behaviour, and the measures we will use to monitor and analyse prices and behaviour
  • how we will monitor the impact of policy developments
  • the processes and timing for the collection of information, including what data we will require.'

Submissions close 19 December. The first report is due to the Treasurer on 31 March 2019.

See media release. View discussion paper.

 

Pacific National Train
Image: By Tjbulic (Own work) [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons

21 November 2018 - Pacific National/Aurizon freight deal before the federal court

The ACCC launched action in July to block the sale of some of Aurizon's assets to Pacific National alleging the parties had reached an anti-competitive understanding relating to Aurizon's intermodal business (contrary s s 45) and alleging the proposed acquisition would substantially lessen competition (contrary to s 50). Following an amendment to the statement of claim by the ACCC on Friday, the hearing commenced in the Federal Court today before Justice Jonathan Beach.

See eg,

 

Oil rig image

16 November 2018 - ACCC will not oppose Santos-Quadrant deal

The ACCC has announced it will not oppose the proposed acquisition of Quadrant Energy Holdings Pty Lt by Santos Limited. Both actively produce and supply natural gas and crude oil in WA and jointly own certain domestic gas processing facilities.

In its media release the ACCC stated that it considered it unlikely the proposed acquisition would substantially lessen competition in supply of gas to domestic customers in WA; importantly, it would 'continue to face strong competition from a range of suppliers' including Chevron and Woodside.

View merger register for more details.

 

Horses racing

15 November 2018 - ACCC will not oppose Punters' acquisition of Racenet

The ACCC has announced it will not oppose the proposed acquisition of Racing Internet Services Pty Ltd (Racenet) but Punters Paradise Pty Ltd (Punters). Punters is a subsidiary of News Corp Australia Investments Pty Ltd. Both Punters and Racenet are digital platforms providing racing news. The ACCC considered that there were numerous alternative sources of online racing news and it was unlikely the proposed acquisition would substantially lessen competition.

View media release and merger register for more details.

 

Railway track

15 November 2018 - ACCC will not oppose Vossloh Austrak deal

The ACCC has announced it will not oppose the proposed acquisition of Austrak by Vossloh Australia. Both are suppliers of rail track components. There is no horizontal overlap between products supplied; the ACCC focussed on vertical links, considering whether the acquisition would enable the combined entity to 'lessen competition in either turnouts or fastenings by foreclosing its rivals'. The ACCC concluded existing manufacturers had capacity to expand output with the result that they would operate as a constraint on the merged entity.

View media release and merger register for more details.

 

Lady justice

12 November 2018 - Federal Court dismisses Obeid appeal against refusal to grant suppression order

The Federal Court has dismissed an application by Moses Obeid for leave to appeal against the Court's decision to refuse to grant a suppression order over part of its reasons for decision in an alleged bid rigging case.

The Federal Court dismissed the ACCC's bid rigging proceedings, but the ACCC filed an appeal on 3 August 2018 (yet to be heard).

As a result of this decision the judgment of 6 July 2018 is no longer subject to a suppression order.

See ACCC media release.

See also:

 

Press reporter and photographer

8 November 2018 - ACCC will not oppose Nine-Fairfax merger

The ACCC has announced it will not oppose the proposed merger between Nine Entertainment and Fairfax Media.

In its media release the ACCC noted that it received more than 1,000 submissions as part of an 'extensive' investigation which raised 'extremely complex issues', but ultimately concluded that the 'proposed merger was not likely to substantially lessen competition in any market'.

View merger register for more details.

Plenty of media - from the Fairfax/Nine group: Max Mason, 'ACCC won't oppose merger of Fairfax Media and Nine Entertainment' (AFR, 8 November 2018), Jennifer Duke, 'Competition regulator gives green light to Nine-Fairfax merger' (SMH, 8 November 2018), Rosemarie Lentini, 'ACCC won’t oppose Nine-Fairfax merger' (Nine, 8 November 2018).

Other media: AAP, 'ACCC gives Nine, Fairfax merger the tick' (SBS News, 8 November 2018), Alex Druce (AAP), '$4B Nine, Fairfax merger clears ACCC hurdle' (The West Australian, 8 November 2018), Luke Henriques-Gomes and Amanda Meade, 'ACCC says it won't oppose Nine Fairfax takeover' (The Guardian, 8 November 2018) and plenty behind The Australian's paywall.

 

Handshake deal

6 November 2018 - Public competition assessment published in relation to proposed acquisition of Woolworths service stations by BP

The ACCC has published a Public Competition Assessment of the proposed acquisition by BP of Woolworths' retail service station sites; it opposed this proposed acquisition in December 2017.

BP - proposed acquisition of Woolworths' retail service station sites (published 6 November 2018)

This is the fourth Public Competition Assessment published this year. The other were:

Sydney Transport Partners Consortium (including Transurban) - proposed acquisition of WestConnex interest (published 11 October 2018; acquisition not opposed by the ACCC on 30 August 2018, subject to court enforceable undertakings)

Caltex Australia Petroleum Pty Ltd - proposed acquisition of assets from Milemaker Petroleum (published 25 July 2018; acquisition not opposed by the ACCC on 4 May 2017)

Saputo Dairy Australia Pty Ltd proposes to acquire Murray Goulburn's operating assets (published 17 May 2018; acquisition not opposed by the ACCC on 4 April 2018 subject to court enforceable undertaking)

This is an improvement on the single PCA published in 2017 but short of the six published in 2016. See the PCA home page for details.

 

Corporate women

6 November 2018 - Gender Disparity in Cartel Conduct

Andrew Christopher and Sarah Andrews have a paper in the latest ABLR discussing gender disparity, both in Australia and internationally, in relation to individuals involved in cartel conduct. Why do women engage in cartel conduct less often than men? You'll need to read it to find out:

Andrew Christopher and Sarah Andrews, 'Gender Disparity in Cartel Conduct' (2018) 46 ABLR 238 (subscription required)

 

Signposts representing guidlines or directions

1 November 2018 - ACCC Guidelines

Last week the ACCC released its latest set of updated Guidelines:

These add to the set of updated Guidelines published on 31 August 2018:

 

Petrol pump

31 October 2018 - PM demands action from ACCC on petrol prices

Prime Minister, Scott Morrison, has demanded 'answers' from the ACCC on rising fuel prices, saying in a local radio interview that he was "expecting some action".

ACCC Chair, Rod Sims, was on the media circuit yesterday, addressing the demands, highlighting the key problem as the 'overseas oil prices and the exchange rate' and (again) expressing the view that proposed divestiture powers were not likely to 'deal with the issue'.

See:

See also the ACCC's second petrol industry report, released last week, and assoicated media release: Consumers have more options to shop around for petrol.

 

5G network diagram

30 October 2018 - Sims: Challenges and opportunities in a 5G world

ACCC Chair, Rod Sims, gave a speech at RadComms 2018 today focussing on the impact of the rollout of 5G networks in Australia.

See ACCC, 'Challenges and opportunities in a 5G world' (Media release, 30 October 2018)

See Rod Sims, 'Competition & the 5G spectrum' (ACMA RadComms 2018, 30 October 2018)

 

Google

26 October 2018 - Google's second submission to digital platforms inquiry

Google's second submission to the ACCC's Digital Platforms Inquiry has been published. The 9-page submission covers the following:

"1. How Google Search benefits users, advertisers and publishers.

2. Google’s incentives to be transparent about how its search algorithms work.

3. The highly competitive landscape in which Google’s advertising technologies compete.

4. Early proposals for regulatory reform arising through the Inquiry.

The ACCC's preliminary preport is due to be submitted to the Treasurer by 3 December 2018.

All submissions can be viewed on the Digital Platforms Inquiry Submissions page.

 

Rod Sims: source ACCC webste

25 October 2018 - Rod Sims re-appointed ACCC Chair until 2022

ACCC Chair, Rod Sims, has been re-appointed for a third term. Sims was originally appointed in 2011 and his current term was due to expire in mid-2019; the re-appointment will see him remain in the position until (at least) 2022. Assuming Sims completes this term he will become the longest serving ACCC/TPC Chair (the first Chair of the TPC, Ron Bannerman, held the role for 10 years)
ACCC Chairs

See Government media release: The Hon Josh Frydenberg MP, 'Government extends term of the ACCC Chair' (25 October 2018)

See also:

 

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Hot topics

 
 
 
     

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.

 

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