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22 February 2019 - Google's turn to criticise ACCC's algorithm proposal

On Monday Facebook's Vice President of APAC Policy, Simon Milner, published a blog piece criticising the preliminary recommendation (rec 3) in the ACCC's Digital Platforms Inquiry. The recommendation is that there be a regulatory authority tasked with, among other things, assessing the impact of ranking news with the aim of identifying the effects of algorithms on production of news and journalistic content.

Now it's Google's turn - and Google agrees with Facebook that an algorithm regulator is not the way to go, but it's also keen to distinguish itself from 'social media sites': Google Australia, Our response to the ACCC Digital Platforms Inquiry Preliminary Report' (21 February 2019).

Submissions on the Preliminary Report were due last Friday (15 Feb). They are not yet available on the Inquiry website.

See Vanessa Mitchell, 'Google hits back at ACCC, says algorithm regulator risks poor outcomes' (CMO, 21 February 2019), Orlaith Costello, 'Google hits back at ACCC' (Channel news, 22 Feb 2019), Charles McConnell, 'ACCC should reconsider competitive landscape, Google says' (GCR, 21 February 2019).

 

Dollar signs

22 February 2019 - No adverse cost orders for Part IV litigation

On Monday the Treasury Laws Amendment (2018 Measures No. 5) Bill 2018 passed the House. This included repealing s 51(3) (effective 6 months after Royal Assent).

In addition, during the course of its passage several amendments were proposed by the Senate, including opposition amendment 8552 which added small business access to justice provisions. The amendment provides for assistance by the Ombudsman in relation to Part IV actions involving small business or family enterprises (via amendments to the Australian Small Business and Family Enterprise Ombudsman Act 2015) and provides for 'no adverse costs orders' in relation to Part IV actions affecting small business or family enterprises.

To facilitate the no adverse costs orders change, s 82 will be amended to allow the court to order that an applicant is not liable for the costs of the respondent, regardless of the outcome. Certain criteria must be satisfied before the court can make such an order (including that the action raises a reasonable issue for trial). The change will apply to actions brought on or after 1 July 2019.

See Hansard extract of Andrew Leigh MP discussing this amendment, including the following:

Labor's small business access to justice policy allows a small business to request a no adverse cost order when bringing on a court action for a breach of competition law. If the judge decides the case is in the public interest, the small business won't risk paying the big business's costs if they lose. As the Harper competition review concluded, 'there are significant barriers to small business taking private action to enforce competition laws.' Many commentators have noted that small business isn't scared so much of their own legal costs, but of being bankrupted by the legal costs of the other side.

 

NZ Australia map - source from Pixabay

20 February 2019 - Updates from across the ditch: NZ proposes misuse of market power effects test

The NZ government is proposing to amend the Commerce Act to introduce an effects test for misuse of market power (and to repeal certain IP exemptions). A review is open for submissions until April Fools Day ... really ...

Nick Crang (Duncan Cotterill) discusses the proposed changes here: Nick Crang, 'Changes to Commerce Act would restrict actions of firms with substantial market power' (Mondaq, 20 February 2019).

See also:

 

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

20 February 2019 - ACCC v Pacific National and Aurizon back in court

In July last year the ACCC instituted proceedings against Pacific National and Aurizon: See ACCC's original media release (19 July 2019).

The hearing has continued before Justice Beach this week; mlex reporter, James Panichi has been following the action and reports 'grumpiness' in the Federal Court ...

See also: Christine Caulfield, 'ACCC cuts collusion claims as trial against Pacific National, Aurizon comes to an end' (Lawyerly, 15 Feb 2019).

 

IP protection

18 February 2019 - Bill to repeal s 51(3) CCA passes both houses

The Treasury Laws Amendment (2018 Measures No. 5) Bill 2018 passed the House today; it has now passed both houses. The change is scheduled to commence six months after the Act receives Royal Assent.

The House considered Senate amendments unrelated to the s 51(3) change.

View bill as passed by both houses (relevantly schedule 4).

See also 'Where to now? Longstanding IP exemption repealed in Australian competition laws' (Gilbert+Tobin, 19 February 2019)

 

18 February 2019 - ACCC newsletter: misuse of market power

The ACCC has released its second 'Competition Law Newsletter', this time focussing on Misuse of market power: the law and the ACCC's enforcement focus.

Read newsletter.

 

Facebook

18 February 2019 - Facebook not impressed with proposal for algorithm regulator

Facebook's Vice President of APAC Policy, Simon Milner, has published a blog piece criticising the preliminary recommendation (rec 3) in the ACCC's Digital Platforms Inquiry that there be a regulatory authority tasked with:

'... monitoring, investigating and reporting on the criteria, commercial arrangements or other factors used by relevant digital platforms (identified according to objective criteria reflective of influence and size) to impact:

(a) the ranking and display of advertisements (or other content when displayed alongside advertisements) with the aim of identifying whether the platforms may be discriminating in favour of their own related businesses or a business with which they have a specific commercial relationship as well as the potential competitive effect

(b) the ranking and display of news and journalistic content with the aim of identifying the effects of algorithms or other policies on the production of news and journalistic content or competition in media markets.

The regulatory authority could also refer matters to other government agencies for investigation where relevant.

...'

See Simon Milner, 'How can Facebook best support sustainable journalism in Australia?' (Facebook, 18 February 2019).

See also: Jennifer Duke, ''People not regulators should decide': Facebook slams calls for crackdown' (The Age, 18 February 2019) and Competition Lore podcast, 'What's the 'right' regulation for Facebook?' with Sam Knox, Facebook's Associate General Counsel.

 

Digital platoforms representation - equations

16 February 2019 - Sims on Digital Platforms Inquiry

ACCC Chairman, Rod Sims, delivered a presentation to the IIC Australian Chapter's Digital Platforms Inquiries Event in Sydney on Monday. A video of that presentation is now available here.

A copy of the speech is also available from the ACCC website: Sims, 'Insights and impacts of the ACCC Digital Platforms Inquiry' (11 February 2019)

See also Angela Flannery, 'ACCC Chair's insights: The Digital Platforms Inquiry' (Holding Redlich, 18 February 2019).

 

IP protection

15 February 2019 - Bill to repeal s 51(3) CCA passes the Senate after all, but with amendments

After suggesting the Treasury Laws Amendment (2018 Measures No. 5) Bill 2018 had missed out on Senate debate yet again, it magically appeared before the Senate and passed soon after 8pm last night (thanks for the heads up Brent Fisse) with amendment.

The amendments do not relate to the IP changes.

The Bill is expected to appear before the House next week.

 

IP protection

14 February 2019 - No debate yet on bill to repeal s 51(3) CCA

The Treasury Laws Amendment (2018 Measures No. 5) Bill 2018, if passed, would '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' by repealing subsection 51(3). It passed the House of Representatives on 17 October and was introduced to the Senate the following day. It was last scheduled for debate in the Senate on 27 November last year, but dropped of the schedule ... again.

There are now three proposed amendments (to other parts of the bill) that appear on the bill homepage, but none have been moved in the Senate; it was listed for discussion under general business in today's Red (by Senator Collins), but this was later withdrawn.

There were plenty of 'Treasury Laws Amendment' bills were up for debate in the Senate this week, but not this one, with the result that there's a fair chance it could lapse. But, just in case it does manage to get up, or is re-introduced down the track, it is well worth reading Brent Fisse's critique of the Bill, published on his website today:

Brent Fisse, 'Proposed Repeal of Section 51(3) of Competition and Consumer Act 2010 (Cth) and lack of proposed supply/acquisition agreement cartel exception' (14 February 2019)

 

Cows grazing on pasture

14 February 2019 - ACCC does not oppose DLF Seeds' acquisition of PGG Wrightson Seeds

The ACCC will not oppose DLF Seeds’ proposed acquisition of PGG Wrightson Seeds.

See ACCC media release.

View merger register.

 

Blood cells

13 February 2019 - Cryosite ordered to pay more than $1m for 'gun jumping' cartel conduct

The Federal Court has ordered Cryosite to pay $1.05m in penalties for cartel conduct relating to its asset sale agreement with Cell Care. Cryosite admitted the contravention.

Following the decision, ACCC Commissioner, Sarah Court, said:

When companies jump the gun and coordinate or integrate competing businesses before finalising an acquisition between them, this can lead to permanent structural change in the market

Such cartel behaviour, which had the effect of ‘gun jumping’, undermines the effective functioning of the ACCC and the merger process

We want to be clear that parties to a transaction must remain independent and continue to act as competitors, even after they have signed a business or share sale agreement, until the deal is completed.

On this issue of penalty Justice Beach observed:

[49] ... the penalty to be imposed for cartel conduct of the kind I am considering ahead of a proposed sale or its completion needs to be sufficiently high to deter businesses who may otherwise be able to circumvent the proper application of s 50 and its associated divestiture remedy or at the least render less effective or nugatory such a remedy.

[50] Further, any penalty must be sufficient to overcome the broader incentives to businesses to prematurely coordinate or integrate their businesses ahead of the completion of a sale in a manner which has an anti-competitive purpose or effect. ...

 

In this case, although the penalty imposed was just over 10% of the maximum available for the contravention, Justice Beach observed that, in light of the size and financial position of cryosite, the penalty 'could not reasonably be regarded as an acceptable cost of doing business, and could be expected to render any risk/benefit analysis materially less palatable to other potential wrongdoers.' (para 88).

See ACCC, 'Cryosite to pay $1.05m for 'gun jumping' cartel conduct (13 Feb 2019).

See ACCC v Cryosite Ltd [2019] FCA 116 (13 February 2019).

See also Annalisa Heger, 'ACCC succeeds in first merger 'gun-jumping' cartel prosecution' (HSF, 18 February 2019)

 

Digital platform icons

13 February 2019 - Katharine Kemp discusses digital platform advertising in latest Competition Lore podcast

Dr Katharine Kemp discusses the key findings and recommendations contained in the ACCC's preliminary report for the Digial platforms inquiry in Episode 20 of the Competition Lare podcast ('Platforms, ads and the media?').

 

Hand pointing at software

13 February 2019 - ACCC requests information from accounting firms over 'cartel-like' behaviour

The AFR is reporting that the ACCC has requested information from the big four accounting firms (Deloitte, EY, EPMG and PwC) regarding 'the way they sell audit and consulting services'.

See Edmund Tadros and Tom McIlry, 'Deloitte, EY, KPMG, PwC probed by ACCC over cartel conduct' (AFR, 13 February 2019) and Edmund Tadros and Tom McIlroy, 'The ACCC's cartel probe into Deloitte, EY, KPMG, PwC 'difficult to prove'' (AFR, 13 February 2019)

See also Sally Whyte, 'Labor asks ACCC to investigate big four accounting firms' (SMH, 4 September 2018) and Edmund Tadros, Thom McIlroy, 'Deloitte, EY, KPMG, PwC should be probed for cartel conduct: Labor' (AFR, 3 September 2018).

 

Digital platform icons

11 February 2019 - Sims on the Digital Platforms Inquiry

ACCC Chair, Rod Sims, has delivered a speech to the International Institute of Communications this morning entitled 'Insights and impacts of the ACCC Digital Platforms Inquiry'. Sims discusses some of the issues being explored in the Digital Platforms Inquiry, particularly in relation to news and journalism.

View speech.

See also John McDuling, 'ACCCs Rod Sims to maintain pressure on Google and Facebook' (SMH, 11 February 2019), Max Mason, 'Google and Facebook need to take more responsibility for future of journalism, ACCC boss Rod Sims says' (AFR, 11 February 2019) and Amanda Meade, 'Regulation needed to save Australian journalism from Facebook and Google, watchdog says' (The Guardian, 11 February 2019).

 

Garmin on bike

7 February 2019 - Court dismisses application for summary judgment by Garmin

Justice Derrington in the Federal Court has given leave to B&K Holdings (Qld) Pty Ltd to amend its statement of claim and has dismissed Garmin's application for summary judgment.

B&K Holdings allege contraventions by Garmin Australasia Pty Ltd of s 46 (post-Harper, in the form of predatory pricing), s 45, 47 and also allege misleading or deceptive conduct.

In the course of his judgment Justice Derrington spent some time discussing principles around predatory pricing in section 46, including whether or not it is necessary that products be sold below 'avoidable cost'.

A case management hearing is listed for 26 February.

See B&K Holdings (Qld) Pty Ltd v Garmin Australasia Pty Ltd [2019] FCA 64

 

Qantas plane

7 February 2019 - ACCC investigating Qantas' completed acquisition of an interest in Alliance Airlines

The ACCC has commenced an informal review of Qantas' completed acquisition of a 19.9% interest in Alliance Aviation Services Ltd to assess whether there has been a breach of section 50 (merger provision). The issues will be contained in a market inquiry letter (not yet published on the merger register). Submissions are due by 4 March 2019.

View merger register.

See also: Ellis Taylor, 'ACCC probes Qantas purchase of Alliance stake' (FlightGlobal, 8 February 2019), Nick Wenzel, 'Qantas acquires stake in Australian charter airline' (International Flight Network, 6 Feb 2019).

 

Shipping containers

7 February 2019 - ACCC, NCC and Port of Newcastle regulation

Matthew Stevens has an opinion piece in today's AFR discussing what he describes as the 'NCC's staggeringly wrong-headed draft conclusion that the [ACCC's] oversight of the world's biggest coal port should be revoked' and the ACCC's response (published Wednesday) to that conclusion.

See Matthew Stevens, 'The ACCC and NCC slug it out over Port of Newcastle regulation' (AFR, 7 February 2019). See also Matthew Stevens, 'Competition tsars go to war over Newcastle port regulation' (AFR, 19 December 2018)

For more detail see:

  • Submissions to NCC (including ACCC submission dated 6 Feb 2019)
  • The NCC's 'Statement of Preliminary Views' on Port of Newcastle's application to the NCC to recommend revocation of the declaration of the shipping channel service at the Port of Newcastle (published on 19 December 2018).

 

Wheat

7 February 2019 - ACCC seeks views on regulation at GrainCorp's Portland bulk grain terminal

The ACCC has 'released an issues paper seeking views on whether to exempt GrainCorp Operations Limited (GrainCorp) from certain parts of the [mandatory Port Terminal Access (Bulk Wheat) Code of Conduct] at its port terminal facility at Portland.'

Submissions are due by 28 February 2019.

View media release.

View issues paper and GrainCorp's submission.

 

Train and signals

7 February 2019 - ACCC discontinues Siemens Alstom merger review

The ACCC has discontinued its review of the proposed Siemens Alstom merger in light of the European Commission's (EC) decision to block the transaction and the statements by the merger parties that the deal is off.'

The ACCC had previously expressed concerns about the merger and issued a statement of issues on 6 September 2018.

See media release.

See merger register.

 

Candle

1 February 2019 - Vale Professor Maureen Brunt AO

I was saddened to learn of the passing this week of former Competition Tribunal Member and economist, Professor Maureen Brunt AO.

The ACCC has issued a media release acknowledging Professor Brunt's role as 'one of Australia's most influential competition economists and academics ... instrumental to the development of our competition policy and law framework.'

Professor Brunt was remembered at a memorial service in Melbourne on 7 February 2019.

View media release.

 

Mobile phone

22 January 2019 - ACCC suspends review timeline for proposed TPG-Vodafone merger

The ACCC today suspended its merger review timeline for the proposed merger between TPG Telecom Limited and Vodafone Hutchison Australia Pty Ltd, citing a delay in receiving information from the parties. The previous provision decision date of 28 March 2019 has been replaced with an expected new provisional date of 11 April 2019.

Last year the ACCC published a Statement of Issues outlining preliminary concerns about the proposed merger.

See merger register.

See also James Fernyhough, 'ACCC pushes back decision on Vodafone-TPG merger' (AFR, 22 January 2019).

 

Rubbish bins

8 January 2019 - ACCC raises concerns over Bingo's proposed acquisition of Dial-a-Dump

On 29 November the ACCC issued a Statement of Issues outlining preliminary competition concerns relating to Bingo's proposed acquisition of Dial-a Dump. Today the ACCC launched a consultation process seeking market views about whether a proposed divestment by Bingo would address potential competition concerns.

See ACCC media release.

See merger register.

 

Money - notes

6 January 2019 - Sims warns business of higher fines

In today's AFR James thomson reports on ACCC Chairman, Rod Sims', warning to the corporate sector over higher fines for misleading consumers and increased scrutiny of merger benefit claims.

See: James Thomson, 'ACCC warns 'arrogant' business sector of huge fines' (AFR, 6 January 2019)

 

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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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