Case: Melway Publishing Pty Ltd v Robert Hicks Pty Ltd [2001] HCA 13 ; (2001) 205 CLR 1
Outcome: applied
The comments of his Honour were adopted by Gleeson CJ, Gummow, Hayne and Callinan JJ in Melway Publishing Pty Ltd v Robert Hicks Pty Ltd [2001] HCA 13 ; (2001) 205 CLR 1 at 21 and 27, where their Honours said: "As Dawson J explained, in Queensland Wire , market power means capacity to behave in a certain way (which might include setting prices, granting or refusing supply, arranging systems of distribution), persistently, free from the constraints of competition..." (at 27) 94 The notion of "taking advantage of" in s 46(1) is closely related to the proscribed purpose in the section ( Melway 205 CLR at 16-17). As the majority observed in Melway , (The TPA) requires, not merely the co-existence of market power, conduct and proscribed purpose, but a connection such that the firm whose conduct is in question can be said to be taking advantage of its power (at 21). 95 So for example, in Queensland Wire [1989] HCA 6 ; 167 CLR 177 Deane J held that the identification of the proscribed purpose in that case led directly to the conclusion that BHP was taking advantage of its market power, because the nature of the purpose was such that, in the circumstances of that case, it could not have been achieved by the conduct impugned had it not been for the existence of the market power ( Queensland Wire 167 CLR at 197-198, Melway 205 CLR at 17). The majority in Melway at 18 also noted comments of Scalia J in the Supreme Court of the United States when his Honour said: "Where a defendant maintains substantial market power, his activities are examined through a special lens: Behavior that might otherwise not be of concern to the antitrust laws or that might even be viewed as procompetitive can take on exclusionary connotations when practiced by a monopolist." ( Eastman Kodak Co v Image Technical Services Inc (1992) 504 US 451 at 488) 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." 112 In this case it is clear that, in the Wholesale Market, the respondent is a monopoly supplier. Although there was some discussion throughout the hearing as to local government authorities in Queensland being a source of data, it is clear that they are not a source of Bulk Data. It is also not in contention that the reason for this monopoly is because of the statutory function of the respondent, which, as stated by Mr Rush in his affidavit, is the point of truth source for sales data. However as pointed out by the majority in Melway 205 CLR at 27: "Freedom from competitive constraint might make it possible, or easier, to refuse supply and, if it does, refusal to supply would constitute taking advantage of market power. But it does not follow that because a firm in fact enjoys freedom from competitive constraint, and in fact refuses to supply a particular person, there is a relevant connection between the freedom and the refusal. Presence of competitive constraint might be compatible with a similar refusal, especially if it is done to secure business advantages which would exist in a competitive environment." 117 Third, I am not persuaded by the submissions of the respondent, or the evidence of Mr Norling, that the removal of names and addresses from the Bulk Data would be conduct expected to occur within a (hypothetical) competitive wholesale market because suppliers other than the respondent in such a wholesale market would be subject to the Privacy Act 1988 (Cth). To paraphrase comments of the majority in Melway 205 CLR at 22 in a similar context, the evidentiary basis for that conclusion is not entirely clear, and not everyone would agree that, as a proposition of fact, it is self-evidently correct. Irrespective whether the information supplied by the respondent was as a matter of law a generally available publication and not subject to the Privacy Act as was submitted, in my view correctly, by the applicant: &#8226; the assumption that the Privacy Act would compel suppliers in the hypothetical Wholesale Market from withholding the Excluded Data was not proven; &#8226; there is no basis in fact or in law made out for assuming that the QVAS data and the supply thereof by a hypothetical competitor in the Wholesale Market is something that would be subject to the Privacy Act ; and &#8226; depending on the identity of such hypothetical competitors they might or might not be organisations subject to the Privacy Act with the result that it was questionable whether the Privacy Act would have any application in any event. 118 Fourth, I do not accept as material the distinction drawn by the respondent between the facts of this case and other refusal to supply cases such as Melway [2001] HCA 13 ; 205 CLR 1 and Queensland Wire [1989] HCA 6 ; 167 CLR 177, in that in those cases there was a refusal to supply one of several acquirers of goods and services. Whether or not all licensees were being treated equally in this case is not germane to the issue of whether the respondent, for reasons of its own, was taking advantage of its market power. (Whether it is relevant to purpose is a different question, which I shall consider shortly). In, for example, a hypothetical situation where a wholesale supplier formulated a strategy of itself entering the retail market and as part of that strategy informed its customers who were retailers in that retail market of its decision to henceforth refuse supply of its products, the fact that all retailers were equally disadvantaged does not mean that the wholesale supplier has not taken advantage of its market power. 121 Irrespective whether the respondent has taken advantage of its substantial degree of market power in the Wholesale Market, as a matter of law it will only be in breach of s 46 if it has done so for a purpose proscribed by s 46(1). That this is so is demonstrated by the unambiguous terms of s 46(1) , and decisions in Australia at the highest level confirming this principle (for example Queensland Wire [1989] HCA 6 ; 167 CLR 177, Melway 205 CLR at 22). 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.