Misuse of Market Power / Abuse of Dominant Position

About Misuse of Market Power

 

Section 46(1) prohibits a corporation with substantial market power taking advantage of that market power for a prohibited purpose. The prohibited purposes include

(a) Eliminating or substantially damaging a competitor … in that or any other market

(b) Preventing entry of a person into that or any other market

(c) Deterring or preventing a person from engaging in competitive conduct in that or any other market

The purpose element has generally been easy to establish; the stumbling blocks have been market power and 'taking advantage'. Recent legislation - the Trade Practices Legislation Amendment Act 2008 - has also provided some guidance on the 'taking advantage' requirement designed to make it easier to prove.

 

Predatory pricing

Section 46(1AA) prohibits predatory pricing, defined as a corporation having substantial market share supplying goods or services below cost for a sustained period for one of the three prohibited purposes (the same prohibited purposes as for s 46(1). This provision was introduced in 2007 and no cases have yet been brought in relation to it.

 

The law

46 Misuse of market power

46A Misuse of market power—corporation with substantial degree of power in trans Tasman market

46B No immunity from jurisdiction in relation to certain New Zealand laws

 

Cases relating to misuse of market power

Queensland Wire Industries v BHP (1989) 167 CLR 177
Leveraging market power - refusal to deal

Melway Publishing Pty Ltd v Robert Hicks Pty Ltd [2001] HCA 13
Refusal to deal, 'taking advantage'

Boral Besser Masonry Limited v ACCC [2003] HCA 5
Predatory pricing (market power)

NT Power Generation v Power and Water Authority [2004] HCA 48; 219 CLR 90
Access

Rural Press Ltd v ACCC [2003] HCA 75
Threats if competition not withdrawn
'taking advantage'

 

Articles relating to misuse of market power

Australia

Julie Clarke, 'Australia's Radical Predatory Pricing Reforms: What business must know' (2008) 1 Deakin Business Review 6

Kathryn McMahon, Competition Law, Adjudication and the High Court [2006] MULR 25; 30(3) Melbourne University Law Review 782

Margaret Brock and Monica Keneley, Section 46: Where we have been and where we are going: a review of the recent debate' (2005) 24(2) Economics Papers 175

Philip Williams, 'Melway Publishing Pty Ltd v Robert Hicks Pty Ltd' [2001] MULR 27; (2001) 25 Melbourne University Law Review 831

Other jurisdictions

International and Comparative

Spencer Weber Waller, Hearing But Not Listening: Comparative Competition Law and the DOJ Monopoly Report, October 2008, Release One (accepted paper for GCP)

 

Reports relating to misuse of market power

Australia

Senate Economics Committee Report on Trade Practices legislation Amendment Bill 2008 (August 2008)

Senate Inquiry into the Effectiveness of the Trade Practices Act 1974 in protecting small business (March 2004)

Griffiths Committee Report (1989)
Mergers, Takeovers and Monopolies: Profiting from Competition?
Report of the House of Representatives Standing Committee on Legal and Constitutional Affairs

Other jurisdictions

DOJ - Competition and Monopoly: Single-Firm Conduct Under Section 2 of the Sherman Act - 2008 Report (withdrawn by DOJ in May 2009)

Guidance on the Commission's Enforcement Priorities in Applying Article 82 EC Treaty to Abusive Exclusionary Conduct by Dominant Undertakings
Published on 3 December 2008

 

Useful links

Forthcoming