Case: Emirates v Australian Competition and Consumer Commission [2009] FCA 312 ; (2009) 255 ALR 35
Outcome: cited
of those material facts, in a case in which s 45A of the TPA is relied on, is the area or areas within Australia in which particular respondents compete with each other and in which they give effect to any anti-competitive agreement to which they are parties. As Middleton J said in Emirates v Australian Competition and Consumer Commission [2009] FCA 312 ; (2009) 255 ALR 35 at 41: "The services the subject of the unlawful provision must be the services supplied by the relevant party to the arrangement in competition with the other party in any market in Australia. Put another way, the area of competition has to coincide with the area of restriction imposed by the unlawful provision: see ss 45A(8) , 4D (1)(a) and (2) ...". In Emirates , Middleton J referred to the issue in the course of dealing with applications to set aside notices issued under s 155 of the TPA. His Honour held (at 52): "... the place of contracting is not determinative of the geographic locality of the relevant market. The references relied upon in Heydon J D, Trade Practices Law (Lawbook Co, subscription service) do not, in context, stand for such a proposition. As the authorities referred to previously indicate, the concept of a 'market' refers to a range of 'competitive activities' relating to the field of actual or potential activities between buyers and sellers among whom there is, or can be, close competition. It involves the 'field of rivalry', not just referrable [sic] to the place of contracting". It had been submitted to his Honour that some observations which I had made in my previous reasons supported the proposition that there could not be a market in Australia unless contracts between buyers and sellers were negotiated and entered into in Australia. One of the respondents' grounds for seeking to have the SASC struck out was that it did not identify the various routes, to and from Australia, on which the various respondents (or some of them) competed. It was in this context that I said at [21] that: "The respondents in the present proceeding are entitled to know where in Australia it is said that they compete with each other named respondent for the provision of international airfreight services. This will depend on where negotiations between the respondents and their customers take place and contracts are entered into. These material particulars are not provided. It cannot be assumed that all or even some of the respondents are in competition, in the necessary sense, in all parts of Australia. In the absence of these material facts the pleadings are deficient in a significant respect". On reflection, I should have used the word "may" instead of "will" in the second sentence of the quoted passage. It was not my intention to rule, on a pleading summons, that the place or places where the international carriers negotiated and entered into contracts with those who wished to use their services, were or would be determinative of the geographic location of the relevant markets. These were relevant but not decisive considerations. If the only substantial competitive activity which occurred between particular carriers on routes into and out of Australia took place overseas this may have suggested that the relevant market was not "in Australia" even if contracts were signed here. On the other hand, if vigorous competition and negotiations in Australia culminated in contracts being signed overseas the opposite conclusion would be likely. These matters were, therefore, material in determining the geographic parameters of the relevant market and, in particular, whether that market was "in Australia". Those parameters differed between the respondent carriers, because they did not all provide services to and from the same ports or along the same routes. For present purposes, the applicant's failure to identify where relevant negotiations took place, and where contracts were entered into and signed between the respondents and their customers, does not lead to the conclusion that it has thereby also failed to plead facts which would be determinative of the geographic boundaries of the market. The failure does, however, mean that material facts which must be provided in order to identify the global market and the part of it which constitutes a "market in Australia" have not been supplied. In its SASC the applicant failed to plead the existence of any relevant market in Australia. It sought to remedy this deficiency, in its FASC, by pleading the existence of multiple markets, variously described. This has served only to create greater confusion. The individual respondents are entitled to know the markets for the provision of international air freight services which are alleged to exist in Australia, and in which of those markets it is alleged that they compete with another respondent or respondents and who those other respondents are. The FASC does not provide this essential information.