Competition Law

Australian Competition Law and Policy Discussion

ACCC Institutes Proceedings Against Cabcharge

Posted by Julie Clarke on 29 June 2009

The ACCC has instituted proceedings against Cabcharge alleging misuse of market power under s 46 and anti-competitive conduct under s 45.

It will be worth keeping an eye on this -particularly in relation to s 46 – the misuse of market power alleged is:

  • ‘refusing to enter into agreements with competing suppliers of processing services that would have allowed Cabcharge’s payment products to be processed through alternative EFTPOS terminals’ and
  • supplying ‘a significant number of taxi meters and fare schedule updates either free of charge or below cost for anti-competitive purposes in relation to taxi meters and processing services’

The ACCC Press Release is thin on detail, but repeated reference to ‘use of market power’ as opposed ot market share suggests that in relation to the second form of conduct alleged the ACCC intends to rely on s 46(1) rather than the new predatory pricing provision, s 46(1AA).  Even if this is the case, the ACCC may rely on the new s 46(4A), allowing the Court to take into account sustained below cost pricing (in this case perhaps a sustained below cost supply of taxi meters and fare schedules).  In relation to both forms of alleged market power abuses, the ACCC will have the benefit of a new s 46(6A) which provides a non-exhaustive list of factors the Court may take into consideration in determining whether a company has ‘taken advantage’ of its market power.  This provision is, as yet, untested, and there is much speculation on its scope – does it merely codify existing law or does it allow a wider range of conduct to satisfy the taking advantage requirement in s 46?  Either way, it will be one to keep a close eye on.

A direction hearing is listed before Justice Finkelstein on 21 July.

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