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Competition Law Reading Room

How likely is "likely"? Metcash, counterfactuals and proof under s 50

Daniel McCracken-Hewson
(2012) 40 Australian Business Law Review 363

 

Abstract

When is a substantial lessening of competition "likely"? This is a critical question in any assessment of whether an acquisition would infringe s 50 of the Competition and Consumer Act 2010 (Cth) and was a key point of contention in the Metcash cases heard by the Federal Court in late 2011. Unfortunately, those cases produced three conflicting views, so there is now considerable uncertainty on this question. The underlying question – which remains unresolved – is how to construe the standard of proof (ordinarily the balance of probabilities) when the infringement itself incorporates a notion of likelihood (a "likely" effect on competition). Two of the Federal Court judges arguably set out inappropriate formulations in answer to this question. Significantly, they sought to interweave the standard of proof with elements of the "counterfactual analysis", the tool ordinarily used to demonstrate an impact on competition. That approach was called into question in the majority judgment of the Full Federal Court.

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