Australian Competition & Consumer Commission v Rural Press Limited

1 Judgment was delivered in this matter on 1 March 2001. No formal orders were made at the time. The applicant was directed to prepare draft orders and declarations to reflect the reasons for decision. Draft orders were duly presented, and considered. They include injunctions to be made under s 80 of the Trade Practices Act 1974 (Cth) ("the Act") against the first to fourth respondents. I gave the parties liberty to make written submissions as to the terms of the draft orders. The determination of any penalty to be imposed under s 76 of the Act has been adjourned for later hearing. I have given directions to that end. 2 Only one issue has emerged from the written submissions. In the light of my reasons, there is no contention that the orders should not include injunctive orders in almost the terms which the applicant seeks, namely orders running for a period of three years restraining conduct of the kind which I found to have been established. The draft order provides that the conduct to be restrained should be that which has the purpose of (a) deterring or preventing a potential competitor or competitor from engaging in competitive conduct in the said market [or in any other market in Australia;] or (b) eliminating a potential competitor or competitor in the said market [or in any other market in Australia]. 3 That is part of the proposed draft orders numbered 3 and 8. The first to fourth respondents submit that the words in draft orders 3(b) and 8(b) "or substantially damaging" should be deleted. That is because my finding was that the first and second respondents had contravened s 46(1)(a) of the Act by conduct which had the purpose of eliminating the fifth respondent as a competitor in a particular market. They contend that it is inappropriate to make orders which operate more widely than the specific conduct found to have been engaged in because (a) there is no evidence to suggest that the first to fourth respondents are likely to engage in any other conduct in contravention of s 46 (b) there is no real risk of the conduct found to constitute the contravention occurring again, particularly having regard to its duration and to the size of the geographical area in which it took place (c) the terms of the injunctive order under consideration raise "the ultimate issue that would be decided on a contempt application", so it should be confined to the finding made at trial, and (d) the issues raised by misuse of market power for the purpose of substantially damaging a competitor are or may be different from those raised in the misuse of market power for the purpose of eliminating a competitor. It is not desirable to make injunctive orders against a corporation or a person in terms which reflect the ultimate issue where such conduct has not been established against that corporation or person: see per Burchett J in Trade Practices Commission v GLO Juice Company Pty Ltd (1987) ATPR 40-788 at 48,596-48,598 and the cases there discussed. 4 My finding was that, in the particular circumstances, the first and second respondents had taken advantage of their substantial degree of power in the market for the provision of regional newspapers in the Murray Bridge District for the purpose of eliminating the fifth respondent as a competitor in that market. The threat was to introduce a regional newspaper into a different district in competition with the fifth respondent and its associated companies published regional newspapers which, if implemented, would have substantially damaged the fifth respondent and its associated companies in that other district comprising one or more other markets. Although that was the threat, the purpose of the first and second respondents was not in fact to cause such damage in that other market or in those other markets. It was the threat itself which was a significant feature of the conduct of the first and second respondents. The threat was not fulfilled. The proposed injunction, without the words objected to, would operate to restrain similar conduct in the future. The applicant's case did not allege that the first and second respondents had contravened s 46 by fulfilling the threat, or indeed by introducing a regional newspaper into that other market or those other markets without notice to the fifth respondent. Whether such conduct might involve a contravention of s 46 of the Act would depend upon all the circumstances. However, to avoid possible unfairness to the first to fourth respondents, I propose to accede to their contention. The injunction will still prohibit the conduct described if its purpose is to deter or prevent a potential competitor or a competitor from engaging in competitive conduct in a market, or if its purpose is to eliminate a potential competitor or a competitor in a market. I think that those terms are sufficiently wide to encompass the conduct which I have found to constitute a contravention of s 46. 5 Accordingly, the orders and declarations which I make are: A. AGAINST EACH OF THE FIRST AND SECOND RESPONDENTS 1. A declaration that each of the first and second respondents, by themselves, their servants or agents, contravened s 46(1)(a) of the Act by taking advantage of their substantial degree of market power in the market for the provision of regional newspapers in the Murray Bridge district for the purpose of eliminating the fifth respondent, a competitor of the first and second respondents, in that market. 2. A declaration that each of the first and second respondents, by themselves, their servants or agents, contravened s 46(1)(c) of the Act by taking advantage of their substantial degree of market power in the market for the provision of regional newspapers in the Murray Bridge district for the purpose of deterring or preventing the fifth respondent from engaging in competitive conduct in that market. 3. An order that the first and second respondents, whether by their directors, servants or agents or otherwise howsoever, be restrained for a period of three years from taking advantage of their market power in the market for the provision of regional newspapers in the Murray Bridge district by threatening a potential competitor or competitor in that market that the first respondent and/or second respondent will introduce a regional newspaper into a district in which a potential competitor or competitor publishes a regional newspaper for the purpose of: (a) deterring or preventing a potential competitor or competitor from engaging in competitive conduct in the said market [or in any other market in Australia;] or (b) eliminating a potential competitor or competitor in the said market [or in any other market in Australia]. B. AGAINST EACH OF THE FIRST, SECOND AND FIFTH RESPONDENTS 4. A declaration that each of the first, second and fifth respondents, by themselves, their servants or agents, contravened ss 45(2)(a)(i) and 45(2)(b)(i) of the Act by entering into and giving effect to an arrangement which contained an exclusionary provision within the meaning of s 4D of the Act. 5. A declaration that each of the first, second and fifth respondents, by themselves, their servants or agents, contravened ss 45(2)(a)(ii) and 45(2)(b)(ii) of the Act by entering into and giving effect to an arrangement which had the purpose and effect of substantially lessening competition in the market for the provision of regional newspapers in the Murray Bridge district. 6. An order that the first, second and fifth respondents, whether by their directors, servants or agents or otherwise howsoever, be restrained for a period of three years, from (a) attempting to make or arrive at; (b) making or arriving at; or (c) giving effect to: any contract, arrangement or understanding which contains a provision that: (i) has the purpose of preventing, restricting or limiting the fifth respondent and/or any person who is or would otherwise be likely to be in competition with the first respondent and/or second respondent, from entering into or competing in the market for the provision of regional newspapers in the Murray Bridge district; or (ii) has the purpose, or has or is likely to have the effect, of substantially preventing, hindering or lessening competition in the market for the provision of regional newspapers in the Murray Bridge district. C. AGAINST EACH OF THE THIRD AND FOUTH RESPONDENTS 7. A declaration that each of the third and fourth respondents were directly or indirectly knowingly concerned in or a party to the first and second respondents' contraventions of ss 46(1)(a), 46(1)(c), 45(2)(a)(i), 45(2)(a)(ii), 45(2)(b)(i) and 45(2)(b)(ii) of the Act as set out in pars 1, 2, 4 and 5 above. 8. An order that the third and fourth respondents be restrained for a period of three years from being in any way, directly or indirectly, knowingly concerned in, or party to, the first respondent and/or second respondent taking advantage of its market power in the market for the provision of regional newspapers in the Murray Bridge district by threatening a potential competitor or competitor in that market that the first respondent and/or second respondent will introduce a regional newspaper into a district in which a potential competitor or competitor publishes a regional newspaper for the purpose of: (a) deterring or preventing a potential competitor or competitor from engaging in competitive conduct in the said market [or in any other market in Australia]; or (b) eliminating a potential competitor or competitor in the said market [or in any other market in Australia]. 9. An order that the third and fourth respondents be restrained for a period of three years from being in any way, directly or indirectly, knowingly concerned in, or party to, the making or arriving at, or the giving effect to, by any person, of any contract, arrangement or understanding which contains a provision that: (a) has the purpose of preventing, restricting or limiting the fifth respondent and/or any person who is or would otherwise be likely to be in competition with the first respondent and/or second respondent, from entering into or competing in the market for the provision of regional newspapers in the Murray Bridge district; or (b) has the purpose, or has or is likely to have the effect, of substantially preventing, hindering or lessening competition in the market for the provision of regional newspapers in the Murray Bridge district. D. AGAINST THE SIXTH RESPONDENT 10. A declaration that the sixth respondent was directly or indirectly knowingly concerned in or a party to the fifth respondent's contraventions of ss 45(2)(a)(i), 45(2)(a)(ii), 45(20(b)(i) and 45(2)(b)(ii) of the Act as set out in pars 4 and 5 above. 11. An order that the sixth respondent be restrained for a period of three years from being in any way, directly or indirectly, knowingly concerned in, or party to, the making or arriving at, or the giving effect to, by any person, of any contract, arrangement or understanding which contains a provision that: (a) has the purpose of preventing, restricting or limiting the fifth respondent, and/or any person who is or would otherwise be likely to be in competition with the fifth respondent, from entering into or competing in the market for the provision of regional newspapers in the Murray Bridge district; or (b) has the purpose, or has or is likely to have the effect, of substantially preventing, hindering or lessening competition in the market for the provision of regional newspapers in the Murray Bridge district. I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Decision herein of the Honourable Justice Mansfield.