Current Issues in Competition Law

Michael Hodge KC

A question that often lurks in construing Part IV of the Competition and Consumer Act is: where do we begin? Do we begin with economic principle, which provides the rationale for a statute that prohibits, and in some cases criminalises, the activities of commercial actors because of the potentially adverse outcomes for the Australian economy? Do we begin with the object of the Competition and Consumer Act – quoted many times by contributors to this twovolume collection – 'to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection'? Or do we begin with the text?

That is, as Perry Herzfeld SC persuasively argues in his contribution 'Statutory Interpretation from Visy to Today' in Volume I, the conventional, appropriate and only necessary starting point for construction of the provisions of Part IV. Of course, the text is also, as Herzfeld notes, where the High Court in FCT v Consolidated Media Holdings Ltd said that the task of statutory construction ends. The tension that can arise between a perspective that begins with the text of the statute and one that begins with the economic principle thought to be intended to be embodied in that text is a healthy one for developing a better understanding and evaluation of the scope and success of Part IV’s prohibitions.

The editors of both volumes of this collection, Michael Gvozdenovic and Stephen Puttick, have assembled a diverse array of viewpoints in the 23 essays written by leading practitioners – economists, lawyers, judges, regulators and academics – of Australian competition law. Among those viewpoints are many contributions that, in different ways, add to the healthy tension from differing perspectives and illuminate aspects of contemporary Australian competition law. Sometimes the lighting is at a sweeping conceptual level (most notably Jill Walker’s swaggering survey of the intersection of economic thought with the text of Part IV in 'An Economic Perspective on Part IV') and sometimes on a focussed point (for example, a number of the essays touch on the meaning of 'likely' in Part IV and the judgment of the plurality of the Full Court of the Federal Court in ACCC v Pacific National which settles, for the moment, that 'likely' in the text of the statute means something other than literally 'likely').

Volume I, titled 'Context and Interpretation', offers a variety of contributions on the philosophy, regulatory structure, critical statutory elements and likely future challenges for competition law in Australia. Volume II, titled 'Practice and Perspectives', contains essays addressing aspects of three particular kinds of competition problems: arrangements between competitors, misuse of market power and mergers. The level of ambition among the essayists varies a great deal. Some contributors have sought to draw together contemporary thought or arguments on an issue. For example, Cento Veljanovski’s 'Cartel Damages: Quantification, Uncertainties, and Future Approaches' is a very useful and readable assessment of methods for quantifying cartel damages. A number of the essays argue for a new or refined approach to an issue of policy or legal application.

Not all of the arguments are persuasive but almost all of them are interesting. Deniz Kayis and Rob Nicholls’ 'Immunity Policies: Uncertainty, Irregularity, and Effectiveness' is an excellent evaluation of an important practical issue for competition enforcement and offers a considered alternative to the ACCC’s current policy. A few of the essays direct attention to a way of looking at an aspect of competition law that perhaps seldom receives much thought. Puttick’s 'Competition Law at the Limit of Common Law and Statute' is a useful reminder that competition law is a creature of statute, almost an alien to the common law, and yet borrows from the common law to make operational the more general machinery of civil contravention like rules of attribution and inchoate and accessorial liability.

Occasionally there is a sense of an author re-fighting a past (perhaps lost) battle but nevertheless the process of analysis remains informative. For only one of the 23 essays does the ambition of the attempt substantially exceed the execution. There are a few standout pieces among the interesting collection. Herzfeld’s essay on the process of statutory interpretation for Part IV of the Act is one of the strongest both for clarity of thought and expression. Walker’s offering of 'one economist’s perspective' on competition law is terrific, interweaving economic theory and technique, provisions of the statute and exemplar cases from Australian competition law. Justice Michael O’Bryan’s essay, 'Section 50: Should the Burden of Proof be Shifted?' is a thoughtful and delicate rebuttal of calls for change to the burden of proof in mergers.

But to note those three particular contributions is in no way to diminish the quality of the other essays in the two volumes. The editors have not sought to assemble an encyclopaedia of Australian competition law. Necessarily that means that there are at least a couple of significant current issues in Australian competition law that do not receive substantive attention in the collection. This is not a criticism, merely an identification of the necessary limits of a slim two volume collection on Australian competition law. The editors have achieved what they have set out to achieve, which is to make a holistic contribution to several debates.

And in any event, as many of the essays implicitly remind the reader by rehearsing the history of reform over a short period of time, predictions about what will be of significance even in the near future in competition regulation are seldom accurate. Felicity McMahon and Jacqueline Downes, in 'Recent Developments in ACCC Review of Media Mergers' in Part 3 of Volume I, provide a particularly striking example of the dangers of such predictions when they point out that for the Foxtel/Austar in 2012 and the Foxtel/Ten merger in 2015, 'the ACCC was reluctant to take into account the potential impact of streaming services on traditional [subscription TV]'. A fundamental pursuit of modern life, television viewing, has been transformed in only a few years.

Regardless of whether what appear now to be the pressing current issues in Australian competition law remain so in a few years, this collection provides valuable insight and stimulation for the development of thinking in the field. BN

Michael Hodge KC