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High Court rules on meaning of market in Australia

Shopping cartOn 14 June 2017 the High Court delivered its judgment in the Air NZ/Garuda air cargo appeals, with the central issue being whether there was a 'market in Australia' as then required by the price fixing provisions. The High Court unanimously found that there was.

The ACCC claimed that Air NZ and Garuda had been involved in price fixing in relation to certain fuel surcharges. The trial judge held that there was no 'market in Australia' and dismissed the case. The ACCC appealed (press release). On 21 March 2016, the Full Federal Court, by majority, upheld the appeals (ACCC v P T Garuda Indonesia Ltd [2016] FCAFC 42). Air NZ and Garuda applied for, and were granted, special leave to appeal on 14 October 2016 ([2016] HCATrans 245).

On 14 June 2017 the High Court delivered its judgment, unanimously dismissing both appeals. On the issue of 'market in Australia', the summary of its judgment states:

'The plurality held that a market, within the meaning of the TPA, was a notional facility which accommodated rivalrous behaviour involving sellers and buyers, and that it was the substitutability of services as the driver of the rivalry between competitors to which s 4E looked to identify a market, rather than the circumstances of the act of substitution or the "switching decision" itself. In this case, the primary judge's findings established that Australia was not merely the "end of the line" for the air cargo services but was also a vital source of demand for those services from customers, namely, large shippers who were regarded as important to the profitability of the airlines' businesses. As a practical matter of business, the airlines' rivalrous pursuit of Australian customers, in the course of which the matching of supply with demand occurred, was in a market which included Australia; that was so even if the market might also have been said to include Singapore, Hong Kong or Indonesia'

Three members of the High Court (Kiefel CJ, Bell and Keane JJ) described the litigation in this case as 'epic', with the trial occupying 57 sitting days and the Full Federal court appeal six days, notwithstanding the fact that the principal issue (whether there was a mrket in Australia) was 'within short compass' (para 4)

See my case page for further details.

See also my blog: 'High Court rules on meaning of "Market in Australia"' (30 June 2017)