Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd [2008] FCAFC 141

Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd [2008] FCAFC 141

Baxter Healthcare Pty Ltd, holding a substantial degree of market power in the Australia-wide sterile fluids market, took advantage of that power by employing an alternative offer strategy in tendering bundled supply contracts to State Purchasing Authorities. The bundled offers, priced significantly lower than the item-by-item tenders, created a credible threat of prohibitively high prices for sterile fluids should the bundled offer not be accepted. This conduct had the purpose of deterring or preventing competitors in the PD fluids market from engaging in competitive tendering, thereby substantially lessening competition and contravening s 46(1)(c) and s 47 of the Trade Practices Act...

Parties
Appellant: Australian Competition and Consumer Commission; First Respondent: Baxter Healthcare Pty Ltd; Second Respondent: State of Western Australia; Third Respondent: State of South Australia; Fourth Respondent: State of New South Wales
Jurisdiction
Australia
Judgment Date
11 August 2008
Procedural Posture
Appeal / Appeal Judgment From a Single Judge of the Federal Court of Australia
Outcome
Appeal allowed
Legal Topics
Misuse of Market Power, Exclusive Dealing, Bundling, Tendering, Market Definition
Competition Law Misuse of Market Power Exclusive Dealing Bundling Tendering Market Definition

Case Brief

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Parties

Australian Competition and Consumer Commission

Appellant

Baxter Healthcare Pty Ltd

First Respondent

State of Western Australia

Second Respondent

State of South Australia

Third Respondent

State of New South Wales

Fourth Respondent

Procedural Posture

Appeal / Appeal Judgment From a Single Judge of the Federal Court of Australia

Legal Issues

  1. 1 Whether Baxter Healthcare Pty Ltd had a substantial degree of power in the sterile fluids market
  2. 2 Whether Baxter took advantage of its market power by its tendering strategy
  3. 3 Whether Baxter's purpose fell within s 46(1)(a) or s 46(1)(c) of the Trade Practices Act 1974 (Cth)

Ratio Decidendi

Baxter Healthcare Pty Ltd, holding a substantial degree of market power in the Australia-wide sterile fluids market, took advantage of that power by employing an alternative offer strategy in tendering bundled supply contracts to State Purchasing Authorities. The bundled offers, priced significantly lower than the item-by-item tenders, created a credible threat of prohibitively high prices for sterile fluids should the bundled offer not be accepted. This conduct had the purpose of deterring or preventing competitors in the PD fluids market from engaging in competitive tendering, thereby substantially lessening competition and contravening s 46(1)(c) and s 47 of the Trade Practices Act...

Court Disposition

Appeal allowed

Orders

  • Order 1 of the orders made by the primary judge set aside
  • Declaratory orders to issue covering contraventions of s 46 and s 47