Case: Emirates v Australian Competition and Consumer Commission [2009] FCA 312
Outcome: followed
is true that the authorities, including three recent cases that have considered the question in relation to international air freight services, accept the proposition (either expressly or impliedly) that a global market is capable of constituting a market in Australia: Riverstone Computer Services Pty Limited v IBM Global Financing Australia Limited [2002] FCA 1608 at [21] , Auskay International Manufacturing &amp; Trade Pty Ltd v Qantas Airways Ltd [2008] FCA 1458 ; (2009) 251 ALR 166 at [21] ; Australian Competition and Consumer Commission v Qantas Airways Ltd (2009) 253 ALR 89 at [35]; Emirates v Australian Competition and Consumer Commission [2009] FCA 312 at [70] . Also, in Emirates , Middleton J accepted that inbound and outbound air freight services are capable of being part of the Australian market: Emirates at [62], [63]. It follows in my view that Singapore Airlines cannot succeed on its first objection to the Statement of Claim because the pleaded markets are at least capable of amounting to markets in Australia. But it does not follow that this provides an answer to the second ground of attack on the pleading. That is because the Statement of Claim alleges a very large number of price fixing understandings, many of which concern freight services between routes which, on their face, have no connection with Australia. This is illustrated in the pleading of the May 2003 Indonesia Understanding and the UAE 2004 Level 5 surcharge understanding which I have set out at [38] and [39] above. Also, for s 45A(1) to be engaged, the services that are the subject of the anti-competitive provision must be supplied by the party to the illegal understanding in competition with the other party in a market in Australia: see Emirates at [22], citing Eastern Express Pty Limited v General Newspapers Pty Limited (1991) 30 FCR 385 at 419 420; South Sydney District Rugby League Ltd v News Ltd [2000] FCA 1541 ; (2000) 177 ALR 611 at [195] and ss 45A(8), 4D(1)(a) and 4D(2) of the Act. The observations made by Tracey J at [21] as to the relationship between the geographic market and the place of contracting were somewhat diluted by the remarks of Middleton J in Emirates at [72]. I will refer to that issue below but it does not affect the pleading deficiencies which I have identified in the ACCC's Statement of Claim. In Emirates , the applicants, who were Emirates and Singapore Airlines, sought to challenge, inter alia , the validity of notices issued to them under s 155 of the Act. The notices sought documents and information in relation to alleged price fixing arrangements relating to international air cargo services. That phrase included international flights inbound to, and outbound from, Australia. The essential question was whether the notices were invalid on the ground alleged by Emirates and Singapore Airlines, namely that they did not relate to a market in Australia. That ground failed because the applicants were unable to eliminate any reasonable hypothesis which was inconsistent with the contention that the market was wholly outside Australia. Middleton J was of the view that on the evidence adduced before him, the market for air cargo services into Australia may be part of the international cargo market and the Australian market is, or may be, a part of that international market. It is true that this observation and his Honour's other observations at [60] [73] support the proposition that the markets pleaded in the present case are capable of amounting to markets in Australia. But these observations do not answer the question which arises in the present application, namely whether the pleading states the material facts that support the allegation that the totality of the impugned conduct substantially lessens competition in a market in Australia. Mr O'Bryan submitted that the decision in Emirates gives rise to an issue estoppel. In my view it does not because, for the reasons stated above, Emirates did not decide the same question as that which arises in the present case: Kuligowski v Metrobus [2004] HCA 34 ; (2004) 220 CLR 363 at [21] , [40]. The relevance of the place of contracting That proposition is somewhat at odds with the remarks of Middleton J in Emirates at [66] that the place of contracting is not determinative of the geographic location of the market. Nevertheless, his Honour did leave open at [72] the possibility that the place of contracting will have some relevance to the determination of the place where the competition takes place. His Honour went on to say of the observations of Tracey J in Auskay : I do not read his Honour's comments (made in the context of a pleading dispute) as dictating that in determinating [sic] the geographic location of the market one is confined by the location of the making of the contract for the subject services. Nevertheless, I do not consider the defect to be incurable. The recent decisions to which I have referred show that it may well be possible for the ACCC to cure the defects. This is particularly so in the light of the remarks of Middleton J in Emirates because his Honour specifically endorsed the proposition that price fixing between two international points in relation to the supply of international air cargo services, wherever engaged in, may have the proscribed effect on competition in a market in Australia. I therefore propose to grant leave to the ACCC to replead within a period to be agreed between the parties. The Exception Mr Archibald conceded that the seventh type of understanding referred to at [35] above, namely the Australian-Middle East understanding, does not suffer from the defects to which I have referred.