Australian Competition & Consumer Commission v Boral Ltd [1999] FCA 1318

Australian Competition & Consumer Commission v Boral Ltd [1999] FCA 1318

BBM did not have a substantial degree of market power in the relevant market of walling and paving products in Metropolitan Melbourne and did not take advantage of such power. Even if BBM had the requisite market power, there is no evidence it engaged in predatory pricing with the prospect of recouping losses by charging supra-competitive prices. BBM’s conduct, including selling below avoidable cost and attempts to purchase competitors’ assets or increase capacity, was consistent with rational competitive conduct in a low-barrier, highly competitive market. Therefore, there was no contravention of s 46 of the Trade Practices Act 1974 (Cth).

Parties
Applicant: Australian Competition and Consumer Commission; First Respondent: Boral Limited (ACN 000 051 696); Second Respondent: Boral Besser Masonry Limited (ACN 000 223 718)
Jurisdiction
Australia
Judgment Date
22 September 1999
Procedural Posture
Civil / Judgment at Trial
Outcome
application dismissed
Legal Topics
Misuse of Market Power, Market Definition, Predatory Pricing, Barriers to Entry, Purpose Test
Competition Law Trade Practices Misuse of Market Power Market Definition Predatory Pricing Barriers to Entry Purpose Test

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Parties

Australian Competition and Consumer Commission

Applicant

Boral Limited (ACN 000 051 696)

First Respondent

Boral Besser Masonry Limited (ACN 000 223 718)

Second Respondent

Procedural Posture

Civil / Judgment at Trial

Legal Issues

  1. 1 Whether the respondents contravened s 46 of the Trade Practices Act 1974 (Cth) by engaging in misuse of market power
  2. 2 Whether respondents had a substantial degree of market power in the relevant market
  3. 3 Whether the conduct in question constituted taking advantage of market power

Ratio Decidendi

BBM did not have a substantial degree of market power in the relevant market of walling and paving products in Metropolitan Melbourne and did not take advantage of such power. Even if BBM had the requisite market power, there is no evidence it engaged in predatory pricing with the prospect of recouping losses by charging supra-competitive prices. BBM’s conduct, including selling below avoidable cost and attempts to purchase competitors’ assets or increase capacity, was consistent with rational competitive conduct in a low-barrier, highly competitive market. Therefore, there was no contravention of s 46 of the Trade Practices Act 1974 (Cth).

Court Disposition

application dismissed

Orders

  • The application is dismissed.
  • The question of costs is adjourned to a date to be fixed.