Competition Law Blogs

I’ve recently come across a couple of new competition law blogs – it’s well worth having a look at and adding to your RSS feeds:

• IP & Competition Law Canada is a well established competition law blog and resource administered by Steve Szentesi
• Chillin’ Competition is a blog by Dr Nicolas Petit, lecturer in competition law and economics at the Institute for European Legal Studies (IEJE) Liege Law Faculty and co-director of the IEJE

Other useful competition/antitrust blogs include

• Antitrust and Competition Policy Blog – this blog by D Daniel Sokol is about the most frequently updated one out there – while it’s light on opinion/content, it’s the place to go for links to new research, speeches, laws, conferences etc.
• Antitrust Law Blog by Sheppard Mullin is regularly updated with good content and opinion
• Antitrust Review is another US-based blog – regularly updated and edited by Hanno Kaiser, David Fischer and Manfred Gabriel
• Antitrust Commentary – another well-established US blog with some good content organised well into subject areas – run by Matthew S. Wild, Senior Counsel at Levitt & Kaizer
• Antitrust Lawyer Blog – less frequently updated, but worth keeping an eye on, run by  Antitrust Lawyers Doyle, Barlow & Mazard PLLC
• The Antitrust Hotch Potch – after a dry spell between March and September, this blog is back in action – run by Prof Damien Geradin

Market definition in Australia

Earlier this month (on 2 October 2009) the Full Federal Court dismissed Singapore Airlines’ appeal against a decision of Justice Middleton which challenged ACCC investigation powers under s 155. A key issue was whether ‘routes between two points wholly outside Australia could be within a “market in Australia”.’ In rejecting the appeal, the Full Federal Court held that ‘prices fixed for legs of a journey which take place wholly outside Australia may ultimately affect competition in a market in Australia’. ACCC Chairman, Mr Graeme Samuel, noted that the decision was crucial in that it

‘confirms that the Act is able to reach cartels formed outside Australia affecting Australians. The Full Federal Court has also confirmed that the ACCC is fully able to investigate conduct occurring overseas. Here we are investigating a worldwide market for air cargo services.’  See ACCC Press Release.

The decision is a positive one. The definition of market in s 4E of the Trade Practices Act as one within Australia is artificial and distorting in cases where the reality is that the market is global or, at least, transnational.  It is not a problem that appears to arise in other jurisdictions which more sensibly focus on local effect on competition without the artificial market restriction.  Confirmation that a global market might be classified as a ‘market in Australia’, even where relevant conduct occurs entirely outside Australia is a positive step – and consistent with foreign approaches to the application of competition laws to conduct occurring abroad – but it is not a complete panacea for the problems generated by our restrictive market definition.

The last time this was officially reviewed was during the course of the Dawson Review of the competition law provisions of the Act which addressed it very briefly in the context of mergers (in which the definition of market is defined as a substantial market for goods or services in Australia, a State, a Territory or a Region of Australia: s 50(6)).  The Report concluded that this definition is not too restrictive and that it allows regard to be paid to foreign competition.  However it entirely glossed over the point that a market which is transnational cannot be.  I briefly discussed this in ‘The Dawson Report and Merger Regulation’ (2003) 8 Deakin Law Review (pages 59-61).   See also submission by Dr Maureen Brunt – ‘Market Definition in the Trade Practices Act: the Challenge of Globalization’.

The issue has arisen in a number of cases recently, with judges taking vastly different approaches to the meaning of market in the TPA.  The importance of defining market in a realistic, rather than artificial, way has increased with the globalisation of markets and will continue to do so as more conduct occurring outside our territorial shores impacts on our domestic competitive environment.  It is time to revisit the issue of market definition for purposes of the competition law provisions of the TPA.

Some international news; Intel, Google etc

The Intel Decision

The European Commission has now released a non-confidential version of its decision in the Intel case (all 518 pages), in which it fined Intel €1.06 billion for abusing its dominant position:

• Press Release announcing €1.06 billion fine against Intel (13 May 2009)
• EC Press release announcing release of its non-confidential reasons in the Intel case (21 September)
• The Intel decision (provisional non-confidential version) released 21 September 2009

US Antitrust Division and the Google Book Search case

The US Department of Justice (Antitrust Division) has weighed into the pending Google Book Search case, recently filing a statement opposing a proposed class settlement:

• The Antitrust Division Filing of 18 September
• Blog discussion by Randy Picker, University of Chicago
• Useful Commentary by Danny Sullivan
• New York Times article – ‘US Urges Changes to Google Book Deal

EU Consults on Vertical Agreements

On 28 July 2009 the EC launched a formal consultation on EU Rules applicable to vertical agreements.  See discussion by Sheppard Mulin.

Changes to Canadian law

Bill C-10, which received Royal Assent on 12 March 12, introduced significant changes to the Canadian Competition Act.  McCarthy Tetrault has provided a couple of useful overviews of the changes:

• Government Enacts Significant Changes to Canada’s Merger Review Laws (29 May 2009)
• Governmeng Enacts Significant Changes to Canada’s Competition Laws (17 September 2009)

Politics and the Pursuit of Efficiency in New Zealand

Bronwyn E Howell has written a paper on ‘Politics and the Pursuit of Efficiency in New Zealand’

ACCC alleges price fixing by Qld construction co’s

The ACCC has commenced proceedings alleging that three Queensland construction companies engaged in price fixing when tendering for Government construction projects between 2004 and 2007.

View ACCC Press Release.

Boost to Competition in the Grocery Industry

Minister for Competition Policy and Consumer Affairs, Dr Craig Emerson, today announced and end to restrictive provisions in supermarket leases with shopping centre owners, with most ceasing immediately. See press release.

Dr Emerson also today released the Rudd Government’s policy paper titled: Introducing more competition and empowering consumers in grocery retailing.  The policy notes, in part, that the Government is still considering its policy position on the notification of supermarket mergers (presumably in reference to its creeping acquisitions discussion papers)

Emerson: Labor is the Party of Competition

On Monday the Hon Dr Craig Emerson MP, Minister for Competition (among other things), delivered a speech tot he Committee for Economic Development of Australia outlining Labor’s approach to competition and consumer policy.

The discussion of competition policy is very good.  In the context of competition law and proposed amendments Emerson discusses the ‘Blacktown Amendment’, proposed by Senator’s Joyce and Xenophon, which proposes to make unlawful the selling of the same product at different prices within a 35km radius.  Emerson is highly critical of the bill, claiming Adam Smith would have described it as ‘a conspiracy against the poor’ and suggesting the description would not ‘be too far off the mark’.  The speech is highly critical of protectionist policies generally and notes that policy proposals ‘that are pro-competitive will get a sympathetic hearing [from the Government] while those that are anti-competitive will be listened to with great precaution and examined with the most suspicious attention’.

Emerson also notes, in the context of competition policy, the Government proposals to ‘improve the timeliness and effectiveness of decision-making process under the national access regime …’

No mention is made of the current reviews into creeping acquisitions and the meaning of ‘understanding’.

Despite the title of the speech, Emerson also spends some time discussing current and future reforms to Consumer law, including the unfair terms provisions, the current review into the unconscionable conduct provisions of the TPA and the proposed additional powers for the ACCC and ASIC to seek civil penalties under the Australian Consumer Law.

Worth a read.

View speech.

New issue of CCLJ

The latest Competition and Consumer Law Journal is out (Vol 17(1)) containing some interesting items on current developments in the law, including:

• In hope of convergence — A regional perspective on competition law (Chief Justice R S French)
• Signalling, collusion and s 45 of the Trade Practices Act (Rhonda L Smith, Arlen Duke and David K Round)
• The contract requirement for the joint venture exceptions under ss 44ZZRO and 44ZZRP of the Trade Practices Act (Brent Fisse)
• Cartel damages and the passing on defence: A comparative analysis (Graeme Edgerton)

For those interested in everything TPA related, there’s also an interesting article on the scope of s 51A (representations about the future) in the context of the current review of Australian Consumer Law.

• The 2009 review of Australian consumer law — An opportunity to reconsider and clarify the rationale and scope of s 51A of the Trade Practices Act (Aviva Freilich and Eileen Webb)

Criminal cartel laws now live in law, but not in print

Today marks the first day the long-awaited criminal cartel laws enter force in Australia.  The news laws create new civil and criminal offences for engaging in cartel conduct.  Cartel participants now risk up to 10 years jail for making or giving effect to cartel provisions, defined (in s 44ZZRD(2)!) to include price-fixing (this replaces s 45A which has been repealed), bid-rigging, restricting outputs and market division between competitors.  Despite the flaws in the drafting of the laws, it is appropriate to treat cartels as criminal and the law should be welcomed. It has been described by former ACCC Chairman as a ‘red letter day for competition law‘.

However, despite the very serious consequences now associated with the new law, Treasury has not produced a consolidated version of the Act – so nobody can clearly see how the new law operates without flicking between two different – and highly complex – documents.  This is unacceptable.  It is normal for legislative consolidations to lag behind new legislation where the amendments are trivial or incidental to amendments made to other acts.  But this is a monumental and complex change and it is not as if Treasury has been caught off guard.  The legislation passed on 16 June.  It received Royal Assent on 26 June.  Since then it has had 28 days for someone among its hundreds of staff to put together a consolidated Act prior to the criminal laws kicking in.  Nobody has bothered.  ComLaw did create a new consolidation on 1 July (AFTER the cartel act received assent) but it didn’t include the new law!

I did it in a few hours – I didn’t get much sleep on Tuesday night compiling the ‘unofficial’ consolidation, but it wasn’t a difficult task. Why?  I’m teaching the new law to my undergraduate students in a couple of weeks and wanted to see the new additions/amendments in context in order to ensure I was capturing the full raft of changes – and it was a useful exercise.  But the only consequence for me of not doing it would be to deliver a sub-standard lecture.  Although my students may consider this a particularly serious and undesirable outcome, for business and lawyers the consquences are clearly much more serious.  It is unacceptable that there is no ‘official’ means of viewing the new law, particularly given the serious – criminal – nature of the consequences for failing to adhere (for which ignorance of the law is no excuse).

This is not the only area in which Treasury has been lax in updating material for the public.  It took well over a week for the Treasury website to acknowledge Dr Craig Emerson MP as the new minister for Competition and Consumer Affairs (this change should take no more than a few minutes).  And his web site is still part of the ‘Ministers for Innovation, Industry, Science and Research’ website (Emerson is also Minister for Small Business, Independent Contractors and the Service Economy; Minister Assisting the Finance Minister on Deregulation‘) rather than Treasury Ministers portal (all the other Treasury Ministers have web sites hosted by Treasury and their quality is far superior).

At least the main page of the site now lists his various ministerial responsibilities – until recently nobody would have guessed from the web site that he had anything to do with Competition policy.  When I complained about this, Webhelp from the Department of Innovation, Industry, Science and Research, informed me (on 3 July) that the page reflecting Minister Emerson’s ministerial responsibilities had been updated (http://minister.innovation.gov.au/emerson/Pages/ministerialresponsibilities.aspx) and that the rest of the website was in the process of being updated and ’should’ be completed shortly.  It’s not clear whether it has been ‘completed’ or whether they are still at work.  If it is ‘completed, then the reference to the Competition Ministry still remains in the shadows of a very large and overbearing ‘header’ which proclaims that this page is for Ministers of Innovation, Industry, Science and Research .  It is not terribly comforting for those hoping for a strong government focus on competition policy.

Treasury has been very keen to release reports, establish inquiries, enact complex new laws in relation to competition policy (for some of that, at least, they are to be commended) but needs to improve its act when it comes to dissemination of information about new laws and policy to the public – in particular, those subject to the new criminal laws have a right to be able to view consolidated legislation which clearly sets out their obligations.

Trade Practices Act – Time to Split it Up?

The Trade Practices Act (TPA) is too big and too complicated. The Government has introduced phase I of their two-phase plan to implement a new Australian Consumer Law which will bulk up the Act even further (the Bill alone runs to 84 pages).  The adds to the additional 90 pages of statutory text generated by the recent passage of the criminal cartel act.  It cannot go on … the annotated acts are bursting at their seems.

So what can be done to stem the flow of dense legislative supplements to what was once a neat little Act (the original 1974 Act comprised a little over 38,000 words of text; the current consolidation contains more than 305,000 words)?  The answer is probably nothing.  It is unlikely there will be any substantive legislative repeals or genuine attempts at simplification, although this would be desirable, and the problem is likely to get worse with current inquiries into unconscionable conduct, creeping acquisitions and the meaning of ‘understanding’ in part IV of the Act likely to generate more legislative content in the near future.  Another answer is needed.

Chris Bowen MP, when he was then Minister for Competition Policy and Consumer Affairs, announced that the Government would change the name of the TPA to the ‘Australian Competition and Consumer Act’ while in the process of implementing the Australian Consumer Law.  It was though that somehow this would ‘better reflect its purposes of promoting competition and empowering consumers’.  It is believed the Govenment is still intent on this name change.  Although, as a bit of a traditionalist, it hurts me to part with the term ‘Trade Practices Act’, of which I am now very fond, the proposed name change might present an opporunity.  While in the process of changing the Act’s name why not split it up?  Let’s divide it into a consumer act (‘Australian Consumer Act’ perhaps) and a competition act (‘Australian Competition Act’?).  These are two separate fields of law and policy (even if there may be some overlapping objectives) – they need not be married together in this legislative jungle.

While we’re in the process of splitting up the Act let’s also re-number it.  A multitude of additions and alterations over the years has led to an absurd numbering system.  The last part of the Act is Part XIII.  You might deduce from this that the Act has 13 parts.  You would be wrong; it in fact has 28 parts and a schedule.  Parts include IIIAA, XIAA, XIB etc.  All very logical!  The section numbering is even better. The new cartel laws begin with section 44ZZRA and end with section 44ZZRV.  Why?  Because the government wanted to slip them in between sections 44ZZR and 45.  Again, very logical and easy to follow for business trying to adhere to the law – and this is not the worst of it. This bizarre numbering is scattered throughout.  We have s 51ACAA (I kid you not), s 44AAGA, s 75AZQ, s 87CAA, s 95AZEA (seriously!), s 10.01 (yes, in Part X the numbering system completely changes – we go from s 119 to s 10.01 – 10.91 then we jump to s 150A at the start of Part XIA – there are no sections 120-150 in the Act) and my personal favorite, s 151BUAAA.  It is simply absurd.

So, with the re-naming and and of the Act we can also begin a re-numbering system.  Nobody really loves s 151BUAAA or will be sorry to see it go.  Lets put what we want in the Act (or Acts), then start the renumbering of parts and sections from scratch.  No doubt future amendments will mess this up a little, but the Act cannot continue on it’s current numbering trajectory.

There are, of course, more serious issues than poor structure and numbering of the Act.  It is highly complex and, as a result, inaccessible for many of those parties to whom it is directed (consumers and business).  But a simplified structure (one that clearly separates consumer and competition legislation and policy) and a logical numbering system would, at the very least, be a good start.

Consolidated TPA

Treasury hasn’t produced one and there’s no current consolidation at ComLaw, so in light of the fact that the criminal cartel laws (and the new civil cartel laws) kick into operation tomorrow I have prepared an unofficial consolidation.  The process of reviewing the entire Act has reminded me what bad shape it is in – I thought the numbering of the new cartel provisions was bad, but I’ve been reminded that the numbering scheme is simply consistent (and in some respects simpler) than most of the rest of the Act …

Note: A current consolidation is now also available at ComLaw and AustLII