Agents as intermediaries : when do they compete with their suppliers?

In cases involving allegations of price fixing under the former s 45A of the Trade Practices Act 1974 (Cth), it was necessary to prove that at least two parties to the arrangement or understanding at issue were “in competition with each other”. The same requirement is contained in the cartel provisions of the Competition and Consumer Act 2010 (Cth) (CCA) that replaced s 45A. The so-called “competition condition” is set out in s 44ZZRD (4) of the CCA. Where a supplier enters into vertical supply arrangements with agents or brokers, problems can arise if the supplier also has a downstream presence. At that functional level there may be a horizontal and therefore competitive dimension, and the competition condition may be satisfied. In such circumstances, great care will need to be taken in any discussions between the supplier and its downstream agents or distributors about the prices, discounts, allowances, rebates or credits that the agent or distributor may charge. Whether agents or brokers competed with their suppliers in vertical supply arrangements arose for consideration in two decisions handed down by the Federal Court in Brisbane...

Strategic entry deterrence : does it constitute a misuse of market power?

A challenge for regulators and the courts has been establishing the boundary between behaviour is exclusionary and should be condemned under s 46 of the then Trade Practices Act 1974 (Cth) (TPA), now s 46 of the Competition and Consumer Act 2010 (Cth) (CCA), and behaviour that is not exclusionary and might even be pro-competitive. This boundary can be especially difficult to draw in the case of entry deterring strategies. Section 46(1) prohibits corporations with a substantial degree of market power from taking advantage of that market power for one of the statutorily proscribed purposes which include preventing the entry of a person into that or any other market. Section 45(2) separately prohibits corporations from making and giving effect to contracts arrangements and understandings that have the purpose, effect or likely effect of substantially lessening competition in a market. The latest case in which the ACCC has failed to satisfy the s 46 criteria is the decision of Greenwood J in ACCC v Cement Australia Pty Ltd [2013] FCA 909 (Cement Australia case). Final orders were published in a separate judgment, in ACCC v Cement Australia Pty Ltd [2014] FCA 148 (28 February 2014). The case concerned an entry deterring strategy, namely the pre-emptive buying of input factors in an upstream market to protect an incumbent with substantial market power in a downstream market and to prevent new entry in the downstream market. Greenwood J found that while Cement Australia Pty Ltd, formerly known as Queensland Cement Ltd (QCL), had substantial market power, its conduct in entering into the pre-emptive contracts was not a contravention of s 46, because Cement Australia had not “taken advantage” of its market power. However, since Cement Australia’s purpose in entering into the pre-emptive contracts was anti-competitive, they were held to contravene s 45(2) of the TPA. The purpose of this Note is to consider only the reasons for judgment in the Cement Australia case in relation to the “taking advantage” element. The judgment was handed down on 10 September 2013. The final hearing date was 15 July 2011, so it was long-awaited. At 714 pages, it is carefully drafted.

A revenda de combustível e os limites constitucionais para a sua regulação: uma análise aplicada aos aspectos concorrênciais e ao controle de preços

The gas retail represents the end of a section of the oil and natural gas derivative chain, for it is at this stage where the commercialization of those merchandises takes place towards the costumers. This process involves an enormous amount of economic agents, which reflects on an activity of great influence on the citizen's everyday. By the time of the gas retail price liberalization, in 2002, there were great expectations towards that measure, for the insertion of that segment in a competitive market was likely to create a decrease in prices. As there was not a drastic drop off in cost, the question was no longer the price itself, but, predominantly, the conduct taken by the economic agents that operate the market. Not in vain, the segment introduces a greater number of different procedures combined with the organs that compose the Brazilian System of Competition Protection. What is understood, however, is that many of these complaints are made in a lightly way, without a proper analysis of the market and its practices, that being why, in this paper, evidences the causes of these complaints and explained what, in fact, occurs in this market. Also, the organs that protect the free initiative in the sector use different methods to assess anticompetitive practices, which are counterproductive on the combat of anticompetitive practice, that being why the present paper analyzes the used methods on a critic perspective, choosing one which is believed to be the most adequate. The present work also tries to present the gas retail prices on a constitutional, free competition, free initiative and consumers defense perspective, analyzing the competition s aspects on the gas market; the shaping of the gas prices; the market boundaries; the anti-competitive practices under the gas market; and analyze the possibility, according to the defined economic standards in the constitutional text of existing a greater control or gas price indexing and/or regulation which limits the distributors and resellers profit on gas. Still, in consequence of this analysis, a study on Natal s market behavior will be developed in its competitive feature. That being said, moreover being a theoretical-descriptive study, data and statistics gathered is used, which will lead, willing to grasp an experiential study on a few aspects of the Potiguar gas retail market

The Economics of EU Railway Reform. Bruges European Economic Policy (BEEP) Briefing 8/2004

The EU began railway reform in earnest around the turn of the century. Two ‘railway packages’ have meanwhile been adopted amounting to a series of directives and a third package has been proposed. A range of complementary initiatives has been undertaken or is underway. This BEEP Briefing inspects the main economic aspects of EU rail reform. After highlighting the dramatic loss of market share of rail since the 1960s, the case for reform is argued to rest on three arguments: the need for greater competitiveness of rail, promoting the (market driven) diversion of road haulage to rail as a step towards sustainable mobility in Europe, and an end to the disproportional claims on public budgets of Member States. The core of the paper deals respectively with market failures in rail and in the internal market for rail services; the complex economic issues underlying vertical separation (unbundling) and pricing options; and the methods, potential and problems of introducing competition in rail freight and in passenger services. Market failures in the rail sector are several (natural monopoly, economies of density, safety and asymmetries of information), exacerbated by no less than 7 technical and legal barriers precluding the practical operation of an internal rail market. The EU choice to opt for vertical unbundling (with benefits similar in nature as in other network industries e.g. preventing opaque cross-subsidisation and greater cost revelation) risks the emergence of considerable coordination costs. The adoption of marginal cost pricing is problematic on economic grounds (drawbacks include arbitrary cost allocation rules in the presence of large economies of scope and relatively large common costs; a non-optimal incentive system, holding back the growth of freight services; possibly anti-competitive effects of two-part tariffs). Without further detailed harmonisation, it may also lead to many different systems in Member States, causing even greater distortions. Insofar as freight could develop into a competitive market, a combination of Ramsey pricing (given the incentive for service providers to keep market share) and price ceilings based on stand-alone costs might be superior in terms of competition, market growth and regulatory oversight. The incipient cooperative approach for path coordination and allocation is welcome but likely to be seriously insufficient. The arguments to introduce competition, notably in freight, are valuable and many e.g. optimal cross-border services, quality differentiation as well as general quality improvement, larger scale for cost recovery and a decrease of rent seeking. Nevertheless, it is not correct to argue for the introduction of competition in rail tout court. It depends on the size of the market and on removing a host of barriers; it requires careful PSO definition and costing; also, coordination failures ought to be pre-empted. On the other hand, reform and competition cannot and should not be assessed in a static perspective. Conduct and cost structures will change with reform. Infrastructure and investment in technology are known to generate enormous potential for cost savings, especially when coupled with the EU interoperability programme. All this dynamism may well help to induce entry and further enlarge the (net) welfare gains from EU railway reform. The paper ends with a few pointers for the way forward in EU rail reform.

Synopolies: The use of cryptographic technologies to impede competition in multiple jurisdictions

Many jurisdictions have developed mature infrastructures, both administratively and legislatively, to promote competition. Substantial funds have been expended to monitor activities that are anticompetitive and many jurisdictions also have adopted a form of "Cartel Leniency Program", first developed by the US Federal Trade Commission, to assist in cartel detection. Further, some jurisdictions are now criminalizing cartel behaviour so that cartel participants can be held criminally liable with substantial custodial penalties imposed. Notwithstanding these multijurisdictional approaches, a new form of possibly anticompetitive behaviour is looming. Synergistic monopolies („synopolies‟) involve not competitors within a horizontal market but complimentors within separate vertical markets. Where two complimentary corporations are monopolists in their own market they can, through various technologies, assist each other to expand their respective monopolies thus creating a barrier to new entrants and/or blocking existing participants from further participation in that market. The nature of the technologies involved means that it is easy for this potentially anti-competitive activity to enter and affect the global marketplace. Competition regulators need to be aware of this potential for abuse and ensure that their respective competition frameworks appropriately address this activity. This paper discusses how new technologies can be used to create a synopoly.

Building an effective trade practices commission : the role of Professor Robert Baxt AO

Bob Baxt, the third Chairman of the Trade Practices Commission, served for a single three year term from 1988 to 1991. He followed Bob McComas, who had deliberately adopted a non-litigious approach to preserving the competitive process, believing that he understood business as an insider and that much of what it did was not anti-competitive, when correctly viewed. Baxt was far more pro-active in his approach, and more closely aligned with that of the first Chairman, Ron Bannerman. Baxt sought to push the frontiers of investigation and precedent, and perhaps, more significantly, sought to influence his Ministers, the government, public servants and public opinion about the need to expand the coverage of the Trade Practices Act, increase penalties and properly resource the Commission so that it could perform its assigned roles. This article examines Baxt’s early and on-going role in teaching Australian students and professionals through his interdisciplinary Trade Practices Workshops, the political context of Baxt’s tenure, including his relations with the Attorney-General ,Michael Duffy, and his skilful handling of the Queensland Wire case.

Regulating unilateral supermarket misconduct as customer/acquirer of goods and services

Supermarkets in Australia may have substantial market power as buyers in wholesale markets for grocery products. They may also have substantial bargaining power in negotiating contracts with their suppliers of grocery products. The Competition and Consumer Act 2010 (Cth) (CCA) regulates misconduct by supermarkets as customer/acquirers in three ways. First, s 46(1) of the CCA prohibits the ‘taking advantage’ of buyer power for the purpose of damaging a competitor, preventing entry or deterring or preventing competitive conduct. Secondly, s 21 of the ACL prohibits unconscionable conduct in business–to–business transactions. Thirdly, Pt IVB of the CCA provides for the promulgation of mandatory and voluntary industry codes of conduct. Since 1 July 2015 the conduct of supermarkets as customer/acquirers has been regulated by the Food and Grocery Industry Code of Conduct. This article examines these three different approaches. It considers them against the background of the misconduct at issue in ACCC v Coles Supermarkets Australia Pty Ltd which the ACCC chose to litigate as an unconscionable conduct case, rather than a misuse of market power case. The article also considers the strengths and weaknesses of each of the three approaches and concludes that while the three approaches address different problems there is scope for overlap and all three should be retained for compete coverage.

Avoidance Techniques: State Related Defences in International Antitrust Cases

Despite its economic significance, competition law still remains fragmented, lacking an international framework allowing for dispute settlement. This, together with the growing importance of non-free-market economies in world trade require us to re-consider and re-evaluate the possibilities of bringing an antitrust suit against a foreign state. If the level playing field on the global marketplace is to be achieved, the possibility of hiding behind the bulwark of state sovereignty should be minimised. States should not be free to act in an anti-competitive way, but at present the legal framework seems ill-equipped to handle such challenges.

This paper deals with the defences available in litigation concerning transnational anti-competitive agreements involving or implicating foreign states. Four important legal doctrines are analysed: non-justiciability (political question doctrine), state immunity, act of state doctrine and foreign state compulsion. The paper addresses also the general problem of applicability of competition laws to a foreign state as such. This is a tale about repetitive unsuccessful efforts to sue OPEC and recent attempts in the US to deal with export cartels of Chinese state-owned enterprises

How to Measure the Deterrence Effects of Merger Policy: Frequency or Composition?

We show that the number of merger proposals (frequency-based deterrence) is a more appropriate indicator of underlying changes in merger policy than the relative anti-competitiveness of merger proposals (composition-based deterrence). This has strong implications for the empirical analysis of the deterrence effects of merger policy enforcement, and potential implications regarding how to reduce anti-competitive merger proposals.

Patent pools and competition law : an examination of the enforcement strategies of competition authorities

"Mémoire présenté à la Faculté des études supérieures en vue de l'obtention du grade de maîtrise en droit, option recherche"

The Legal Implications of Internet Marketing : Exploiting the Digital Marketplace Within the Boundaries of the Law

Au cours des dernières années, le domaine de la consommation a grandement évolué. Les agents de marketing ont commencé à utiliser l’Internet pour influencer les consommateurs en employant des tactiques originales et imaginatives qui ont rendus possible l’atteinte d'un niveau de communication interpersonnelle qui avait précédemment été insondable. Leurs interactions avec les consommateurs, en utilisant la technologie moderne, se manifeste sous plusieurs formes différentes qui sont toutes accompagnés de leur propre assortiment de problèmes juridiques. D’abord, il n'est pas rare pour les agents de marketing d’utiliser des outils qui leur permettent de suivre les actions des consommateurs dans le monde virtuel ainsi que dans le monde physique. Les renseignements personnels recueillis d'une telle manière sont souvent utilisés à des fins de publicité comportementale en ligne – une utilisation qui ne respecte pas toujours les limites du droit à la vie privée. Il est également devenu assez commun pour les agents de marketing d’utiliser les médias sociaux afin de converser avec les consommateurs. Ces forums ont aussi servi à la commission d’actes anticoncurrentiels, ainsi qu’à la diffusion de publicités fausses et trompeuses – deux pratiques qui sont interdites tant par la loi sur la concurrence que la loi sur la protection des consommateurs. Enfin, les agents de marketing utilisent diverses tactiques afin de joindre les consommateurs plus efficacement en utilisant diverses tactiques qui les rendent plus visible dans les moteurs de recherche sur Internet, dont certaines sont considérés comme malhonnêtes et pourraient présenter des problèmes dans les domaines du droit de la concurrence et du droit des marques de commerce. Ce mémoire offre une description détaillée des outils utilisés à des fins de marketing sur Internet, ainsi que de la manière dont ils sont utilisés. Il illustre par ailleurs les problèmes juridiques qui peuvent survenir à la suite de leur utilisation et définit le cadre législatif régissant l’utilisation de ces outils par les agents de marketing, pour enfin démontrer que les lois qui entrent en jeu dans de telles circonstances peuvent, en effet, se révéler bénéfiques pour ces derniers d'un point de vue économique.

Market transparency and collusion: on the UK agricultural tractor registration exchange

We review the decision by the European Commission in the case of the UK Agricultural Registration Exchange. We propose a theoretical model, offering a basis for some of the intuitive arguments used by the Commission on the anti-competitive role of information exchange in the case of price and non price collusion. Market transparency on non price data is shown to be a collusion facilitating device which may achieve stability in otherwise unstable cartels.

Dominance in the Tetra Pak case: an empirical approach

The 1991 decision of the European Commission on the Tetra Pak case was based on information which seemed to prove the firm's anti-competitive behavior. The Tetra Pak case is investigated here focusing on the meaning of multimarket dominance, using empirical techniques. We find that a more rigorous analysis of the data available would not confirm the Commission's assertions. That is, it cannot be concluded with certainty that the Commission was right to relate Tetra Pak's dominance in the aseptic sector to its market power in the non-aseptic sector. Our results suggest a general framework for the analysis of abusive transfer of market power across vertically or/and horizontally related markets.