Competition Law - Lecture Notes

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Basis -> the Australian Constitution:

- Section 51 (xx): the corporation power (principal for competition

- law)

- Section 51(i): the overseas trade and commerce power

- Section 51(i): the interstate trade and commerce power

- Section 51 (xxxix): the individuals power

- Section 122: the territories power

Late 1980s-1990s: process of deregulation and privatisation.

REVIEWS OF COMPETITION POLICY -> AMENDMENTS OF LEGISLATION (CCA)

- The last comprehensive review of competition policy – the Harper Review - ‘Root and Branch’ Review 2014-2015

- Before: the Hilmer Review – was carried out in 1993 and much has changed in Australia’s economy since then. [eg, Competition Policy Reform Act 1995 (Cth)]

- Competition policy has contributed significantly to productivity and price changes in key sectors and in 2005 the Productivity Commission found that the changes resulting from the Hilmer Review increased Australia’s GDP by 2.5 per cent.

Who can compete? (Competitors) (question answers: DOES THIS ACT APPLY?)

- corporations – s. 4 of the CCA

- (unincorporated sole traders – s 6)

- (partnerships – s 6)

- the Crown (directly; government business enterprises)

- Australian competition law (Part IV of the CCA) primarily applies to corporations!

- …Competition Policy Reform Act 1995 (Cth)

Competitors: Corporations

- Corporations: primarily liable under Part IV of the CCA

- Definition: Section 4(1) of the CCA v. 51(xx) of the Constitution

- Financial Corporation – section 4 of the CCA:

- …within the meaning of paragraph 51 (xx) of the Constitution and includes a body corporate that carriers on as its sole or principal business the business of banking or insurance (other than State banking / insurance not extending beyond the limits of the State concerned)

- Essential Feature: engagements in the conduct of dealing in finance – test: the current activities of the corporation[see, State Superannuation Board (Vic) v Trade Practices Commission (1982) 150 CLR 282]

- CONSTITITION: financial activities on a substantial scale – e.g. 5% of the total assets of the University of WA is substantial – Quickenden v O’Connor (2001)

Financial Corporation

- Engages in ACTIVITY of dealing in finance (such as borrowing or lending money) as distinct from transactions (such as the purchase or sale of particular goods for monetary consideration) [in Re Ku-ring-gai Co-op Building Soc; this was confirmed by the Federal Court in State Superannuation Board v TPC (1982)]

EXAMPLES:

- The Government Insurance Office of NSW, a state corporation = a financial and a trading corporation [State Government Insurance Corp v GIO (NSW) (1991)]

- The State Superannuation Board, a Victorian statutory corporation [State Superannuation Board v TPC (1982)]

- A state bank is not a financial corporation under the CCA [Bourke v State Bank of NSW (1990)]

Trading Corporation - Section 4 of the CCA:

- …within the meaning of paragraph 51(xx) of the Constitution. Trade or commerce means trade or commerce within Australia or between Australia and places outside Australia

- The Current Activities Test (the purpose test ‘is no longer valid’):

- established in State Superannuation Board (Vic) v Trade Practices Commission (1982) 150 CLR 282

- based on current activities of the corporation

- the trading activities must be substantial / of a significant proportion / on a significant scale (R v Judges of the Federal Court of Australia and Adamson; Ex parte WA National Football League (Inc) (1979) 143 CLR 190)

Trading Corporation

- The current activities test is not the sole criterion. For instance, the constitution test applies in a case where a corporation has not started to trade yet (Fencott v Muller (1983) 152 CLR 570).

- Trading corporations and financial corporations are not mutually exclusive.

Examples of Trading Corporations:

- State statutory corporations [Commonwealth v Tasmania (1983)]

- Universities [Quickenden v O’Connor (2001)]

- Non-profit organisations [Orion Pet Products Pty Ltd v RSPCA (2002)]

- Hospitals owned and incorporated by the government [E v Australian Red Cross Society (1991)]

Foreign Corporation: Section 4 of the CCA:

“…within the meaning of paragraph 51(xx) of the Constitution and includes a body corporate that is incorporated in an external Territory”

“Territory means:

(a) an internal Territory; or

(b) the Territory of Christmas Island; or

(c) the Territory of Cocos (Keeling) Islands.”

The Nauru Local Government Council, a body incorporated pursuant to the laws of the Republic of Nauru was a foreign corporation [Nauru Local Government Council v Australian Shipping Officers Assn (1978)]

LECTURE 1 OVERVIEW

1. What is “competition law”?

2. Do we need competition law? Why?

3. When does the CCA apply? – Who is liable?

4. Who enforces competition law in Australia?

Lecture