Australian Competition and Consumer Commission v Pacific National Pty Limited (No 2) [2019] FCA 669

Australian Competition and Consumer Commission v Pacific National Pty Limited (No 2) [2019] FCA 669

The ACCC failed to establish its s 45 case concerning the Terminal Services Subcontract. In respect of the s 50 case, the acquisition of the ART by Pacific National, absent an effective undertaking, would have been likely to substantially lessen competition due to increased barriers to entry and the ability and incentive to discriminate against new entrants. However, a suitable undertaking (as proffered and made unconditional by Pacific National) comprehensively constrained such ability and incentive, including through enforceable non-discrimination obligations, access protocols, third-party review, and reporting mechanisms. Accordingly, with the undertaking in place, there was no longer...

Parties
Applicant: Australian Competition and Consumer Commission; First Respondent: Pacific National Pty Limited (ACN 098 060 550); Second Respondent: HV Rail Pty Ltd (ABN 26 615 302 111); Third Respondent: Queensland LH Co Pty Ltd (ACN 620 979 768); Fourth Respondent: Queensland PUD Co Pty Ltd (ACN 620 981 606); Fifth Respondent: Aurizon Holdings Limited (ACN 146 335 622); Sixth Respondent: Aurizon Operations Ltd (ACN 124 649 967); Seventh Respondent: Aurizon Terminal Pty Ltd (ACN 145 991 555); Eighth Respondent: Aurizon Property Pty Ltd (ACN 145 991 724); Interested Person: Qube Holdings Limited
Jurisdiction
Australia
Judgment Date
15 May 2019
Procedural Posture
Competition Law Case (civil) / Post Trial Judgment With Orders and Reasons Delivered by Beach J in the Federal Court of Australia, General Division, Victoria Registry
Outcome
Application dismissed—no contravention established (s 45 or s 50), subject to accepted undertaking.
Legal Topics
Vertical Integration, Substantial Lessening of Competition, Section 50 Competition and Consumer Act, Section 45 Competition and Consumer Act, Vertical Mergers, Access to Essential Facilities, Barriers to Entry, Market Definition, Role of Undertakings in Competition Cases
Competition Law Commercial Law Corporations Law Vertical Integration Substantial Lessening of Competition Section 50 Competition and Consumer Act Section 45 Competition and Consumer Act Vertical Mergers +4 more

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Parties

Australian Competition and Consumer Commission

Applicant

Pacific National Pty Limited (ACN 098 060 550)

First Respondent

HV Rail Pty Ltd (ABN 26 615 302 111)

Second Respondent

Queensland LH Co Pty Ltd (ACN 620 979 768)

Third Respondent

Queensland PUD Co Pty Ltd (ACN 620 981 606)

Fourth Respondent

Aurizon Holdings Limited (ACN 146 335 622)

Fifth Respondent

Aurizon Operations Ltd (ACN 124 649 967)

Sixth Respondent

Aurizon Terminal Pty Ltd (ACN 145 991 555)

Seventh Respondent

Aurizon Property Pty Ltd (ACN 145 991 724)

Eighth Respondent

Qube Holdings Limited

Interested Person

Procedural Posture

Competition Law Case (civil) / Post Trial Judgment With Orders and Reasons Delivered by Beach J in the Federal Court of Australia, General Division, Victoria Registry

Legal Issues

  1. 1 Whether the acquisition of the Acacia Ridge Terminal by Pacific National would have the effect, or be likely to have the effect, of substantially lessening competition in a relevant market contrary to s 50 of the Competition and Consumer Act 2010 (Cth)
  2. 2 Whether the Terminal Services Subcontract (TSS) between Aurizon and Pacific National contained provisions likely to substantially lessen competition in contravention of s 45(2) of the Competition and Consumer Act 2010 (Cth)
  3. 3 Market definition issues including whether markets should be defined by reference to a subset of end users

Ratio Decidendi

The ACCC failed to establish its s 45 case concerning the Terminal Services Subcontract. In respect of the s 50 case, the acquisition of the ART by Pacific National, absent an effective undertaking, would have been likely to substantially lessen competition due to increased barriers to entry and the ability and incentive to discriminate against new entrants. However, a suitable undertaking (as proffered and made unconditional by Pacific National) comprehensively constrained such ability and incentive, including through enforceable non-discrimination obligations, access protocols, third-party review, and reporting mechanisms. Accordingly, with the undertaking in place, there was no longer...

Court Disposition

Application dismissed—no contravention established (s 45 or s 50), subject to accepted undertaking.

Orders

  • Within 14 days, parties to file proposed minutes of orders and short written submissions on: (a) necessary undertaking to be given by Pacific National parties; (b) orders disposing of the proceeding; (c) costs; and (d) any confidentiality issues.
  • Until further order, reasons not to be published beyond specified recipients.