Case: Boral Besser Masonry Ltd v Australian Competition and Consumer Commission [2003] HCA 5 ; (2003) 215 CLR 374
Outcome: applied
The necessity for competition to exist before a "market" is constituted was emphasised in Boral Besser Masonry Ltd v Australian Competition and Consumer Commission [2003] HCA 5 ; (2003) 215 CLR 374. As Gleeson CJ and Callinan J observed: "A market is an area of close competition; a field of rivalry. As the passage from Re Queensland Co-Operative Milling Association Ltd quoted above indicates, and as s 46(3) recognises, both the supply side and the demand side are relevant to an assessment of the market. It does not solve, but merely re-states, the problem to speak of sub-markets. There may be a wider, and a narrower, area of rivalry; but, if the narrowest area itself constitutes a market, then it is power and conduct in that area that must be examined." (at 422-423) (cf Deane J in Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd [1989] HCA 6 ; (1989) 167 CLR 177 at 195) 97 However as was pointed by the High Court in Queensland Wire [1989] HCA 6 ; 167 CLR 177, and subsequently reiterated by the majority of the High Court in Melway 205 CLR at 17, "take advantage of" does not mean anything materially different from "use" and does not require conduct which is predatory or morally blameworthy: per Mason CJ and Wilson J at 191, Deane J at 194, Dawson J at 198, Toohey J at 212-214 (cf also the Full Court in Rural Press Ltd v Australian Competition and Consumer Commission [2002] FCAFC 213 at [137] ). In terms of s 46 it does, however, entail an analysis of actions in the context of a competitive environment, and identification of a determinative approach in the entity with the substantial market power to achieve an outcome proscribed by s 46. So, as Heerey J said in ACCC v Boral Ltd (1999) 166 ALR 410 (at 440), subsequently approved by the majority of the High Court in Boral Besser [2003] HCA 5 ; 215 CLR 374 (at 434): "If the impugned conduct has a business rationale, that is a factor pointing against any finding that conduct constitutes a taking advantage of market power. If a firm with no substantial degree of market power would engage in certain conduct as a matter of commercial judgment, it would ordinarily follow that a firm with market power which engages in the same conduct is not taking advantage of its power." 113 So, to paraphrase Heerey J in ACCC v Boral 166 ALR 410 as adopted by the majority of the High Court in Boral Besser [2003] HCA 5 ; 215 CLR 374, was the conduct of the respondent taking advantage of its market power in withdrawing the supply of the Excluded Data, such that an entity with no substantial degree of market power in the Wholesale Market would not, as a matter of commercial judgment, engage in that conduct? 123 In relation to identifying the "purpose" of the respondent, as illustrated by the cases listed in Miller's Annotated Trade Practices Act 28th edition para 1.46.65, the weight of authority indicates that the relevant purpose is to be identified on the basis of a subjective test rather than objectively, although purpose may be established by inference from the conduct of the respondent (s 46(7)). As Toohey J observed in Queensland Wire 167 CLR, the reference to "for the purpose of" carries with it the notion of an intent to achieve the result spoken of in each of the paragraphs in s 46(1) (at CLR 214). I note that the subjective nature of the relevant intent was also endorsed by the High Court in Boral Besser 215 CLR at 484. 158 Section 46(1)(c) must be read in the context of the policy objective sought to be achieved by the TPA. As pointed out by Gleeson CJ, Gummow, Hayne and Callinan JJ in Melway 205 CLR at 13). "Section 46 aims to promote competition, not the private interests of particular persons or corporations." (cf Boral 215 CLR 373 per Gleeson CJ and Callinan J at 411, Gaudron, Gummow and Hayne JJ at 429, McHugh J at 458-459; Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ in Baxter Healthcare 237 ALR at 535, Rural Press [2002] FCAFC 213 at [139] , Universal Music 131 FCR at 585, and the discussion of Professor Corones at pp 34-37). It follows that the conduct of a person which the corporation or other entity with the substantial degree of market power seeks to affect must be conduct in the nature of competition in a market. Like s 46(1)(a), the breadth of application of s 46(1)(c) is such that it does not need to be the market in which the respondent is a participant (cf Merkel J in Robert Hicks Pty Ltd (t/as Auto Fashions Australia) v Melway Publishing Pty Ltd (1998) 42 IPR 627 at 643, Toohey J in Ross Payne &amp; Co v Western Australian Lamb Marketing Board unreported, Federal Court of Australia, 3 August 1983, Wilcox J in Pont Data Australia Pty Ltd v ASX Operations Pty Ltd (1990) 93 ALR 523 at 555). Accordingly, it is within the scope of s 46(1)(c) that a corporation or entity with a substantial degree of market power in the Wholesale Market could breach s 46(1)(c) because, inter alia , its purpose was to deter or prevent the a person from engaging in competitive conduct in the Retail Market.