Can the purpose of eliminating or substantially damaging the applicant as a competitor in the Retail Market be inferred?
143 However, irrespective whether applicant and the respondent are competitors in the Retail Market, in my view the alleged purpose of the respondent as claimed by the applicant is neither demonstrated by the evidence, nor can it be inferred from the respondent's conduct. In fact, the evidence demonstrates unambiguously that the purpose claimed by the respondent in engaging in the conduct the subject of complaint was in truth its purpose. This is so on any view of the meaning of the word "purpose", and regardless whether the interpretation submitted by the applicant or the respondent as to the meaning of "purpose" in s 46(1) is accepted. The object in view or sought to be achieved by the conduct of the respondent was clearly to ensure that Collected Data could not be used by anyone for the purpose of direct marketing to consumers. It was for this reason, and this reason alone, that the respondent took advantage of its substantial degree of market power in the Wholesale Market. This purpose is not a proscribed purpose within the meaning of s 46(1)(a) TPA. The respondent did not engage in the relevant conduct for the purpose of eliminating or substantially damaging the applicant as a competitor in the Retail Market.
144 I form this view for the following reasons, taking into consideration relevant submissions of the applicant in relation to this claim.
145 First, although the effect of the removal of the Excluded Data may indeed be that the applicant's products are less attractive to its existing customers in comparison to the its existing offerings, this in itself does not persuade me that the respondent's purpose in excluding the Excluded Data is to either damage or eliminate the applicant in the Retail Market. I note that the proposal of the applicant applies to all licensees - the applicant is in no way distinguished. Impact on the business of the applicant is explicable as a potential consequence of the proposal, rather than a purpose.
146 Second, as I have already said, the clear weight of the evidence before me is that the only purpose of the respondent in implementing its proposals was to prevent the misuse of the Excluded Data for direct marketing. Earlier in this judgment I noted the clear Parliamentary intent, as reflected by the introduction of s 27 Land Legislation Amendment Act 2003 (Qld), to prevent licensees allowing the distribution of an owner's name and address for any direct marketing purposes, and the subsequent insertion of clauses to that effect in the new contractual agreements with the licensees. I have also noted the Departmental correspondence, including Briefing Notes, annexed to Mr Rush's affidavits, which support the existence of this purpose. Similarly the consistent evidence of the respondents' witnesses at the hearing was that the only purpose of the respondent was to prevent direct marketing using data originally supplied by the respondent. So, for example:
· evidence of Mr Fry that the respondent wanted to make it such that the use of data sourced from the respondent in direct marketing would not occur (TS p 200 ll 5-15)
· evidence of Mr Witt, including that the previous inclusion of a prohibition on direct marketing clause in the licence agreements did not work out as well as the respondent had hoped, and that accordingly that the proposal had been introduced to stop real estate agents direct marketing (TS p 237 ll 40-45, pp 263-264)
· evidence of Mr Rush including that "All I've ever been trying to achieve is a situation where my Minister can get up in Parliament and say, 'If you've been contacted by a direct marketer, they haven't got your details from the data held in my Department'" (TS p 336 ll 10-12, and further evidence at p 301 ll 20-30).
147 While in some cases where an entity has used its dominant position it may, as the Privy Council said in Telecom Corporation of New Zealand Ltd [1995] 1 NZLR at 402 be hard to imagine a case in which it would have done so otherwise than for the purpose of producing an anti-competitive effect, and it will legitimate for a court to infer from the respondent's use of its dominant position that its purpose was to produce the effect in fact produced, the respondent in this case is a government department under the direction of a State government Minister which, while engaged in supply of data for revenue, is also required to take into account broader community interests. In my view it is not difficult to accept that the public interest to ensure that its data base is not misused for direct marketing purposes is what has motivated the respondent to act in this case.
148 Third, from the consistent evidence of the respondent's witnesses it could not be inferred that changes to the respondent's pricing structure were implemented for the purpose of eliminating or damaging the applicant as a competitor. The respondent's proposal was implemented in relation to all licensees, not only the applicant and in accordance with a Department wide approach. One possible explanation for this development is that the respondent was seeking to eliminate all possible competition in the Retail Market, including that posed by the applicant. However it is inconsistent with a deliberate attack on the applicant specifically as a competitor.
149 Fourth, according to evidence of Mr Witt, the current licence fees are considerably lower than they were in the late 1990s when the applicant paid $600,000 upfront plus $50,000 per month for five years for its licence (affidavit of Mr Witt para 13). The applicant currently pays $158,749 per annum in licence fees, and under the proposed new licence the applicant would pay a maximum of $158,749 comprising licence fees and a capped royalty fee (Witt affidavit para 13, Oakley affidavit para 27). The proposal of the respondent meant, at least in the foreseeable future, that the licensees would not pay more under the proposed licence than they were paying under the current arrangement (oral evidence of Mr Oakley TS p 279 ll 34-45), although clearly without receiving the Excluded Data, which is a key aspect of the applicant's complaint.
150 Fifth, the earnings from the payment of licence fees by the eight licensees - in the order of $1 million per annum - are tiny in comparison with the total budget of the Department. I understand from evidence of Mr Rush that the earnings of the Department from statutory sales in, for example, the 2004-2005 financial year added only approximately $0.17 million to the Department's revenue (TS p 296 ll 23-42).
151 These sums may be compared with the total Departmental budget allocation. According to evidence of Mr Rush, in terms of the departmental budget allocation drawn primarily from treasury allocations and a small amount of departmental revenue, the departmental revenue and expenditure allocations were of the order of just under $500 million in the 2003/2004 financial year, and $784 million or $787 million up until the 2006/2007 financial year (TS p 288 ll 6-10). From the respondent's perspective the revenue earned from the licensees was not substantial or indeed a major issue (evidence of Mr Witt TS p 202 ll 5-15). This supports the respondent's contention that its purpose related only to the prevention of direct marketing, not financial concerns and the elimination or damage of a competitor.
152 Sixth, the introduction of the new pricing structure was explained by Mr Fry as resulting from the introduction of the Department's Information Access and Pricing Policy on 1 March 2004, between the previous licence (commencing on 1 July 2003) and the expiry of this licence on 30 June 2005. According to Mr Fry, that access and pricing policy changed dramatically the way in which the Department would in future provide access to information from the Department (TS p 206 ll 2-20). As I noted earlier in this judgment, in the case of "Developers" (including the applicant) the Information Access and Pricing Policy contemplated payment to the Department a royalty fee and/or upfront fee approved by an authorised Delegated Officer of the Department. This is exactly what is contemplated by the proposed licensing agreement in this case. There is no suggestion that the introduction of the Information Access and Pricing Policy itself was in any way part of a plan by the respondent to eliminate or damage the applicant. I also note that the Information Paper "Access to valuation and sales information beyond June 2005" dated 14 December 2004 (annexure WBF-08 to Mr Fry's affidavit) prepared by the Department and distributed to licensees is compatible with the Information Access and Pricing Policy.
153 Finally, the respondent's witnesses were unequivocal in their evidence, both affidavit and oral, that the move to exclude the Excluded Data was a direct response to the complaints the Department had received, and the failure of provisions in the agreements between the respondent and the licensees to prevent misuse of the Excluded Data through direct marketing. As Mr Fry deposed in his affidavit:
"15. The purpose of making a new proposal to withdraw names and addresses from the bulk data was as a consequence of complaints received from various individuals that their personal details had been obtained by direct marketers and they were concerned about Government information being used in inappropriate ways.
16. Numerous complaints were received by the Department both from individuals concerned about receiving direct marketing and real estate agents complaining about other real estate agents undertaking direct marketing.
17. It had been hoped that by imposing direct marketing provisions in the current licences that this would control the release of information to marketeers to be used for direct marketing.
18. It became apparent that enforcing the conditions in the licence of all licensees was going to be difficult as the Department did not have a business relationship with all control over the businesses alleged to have undertaken the direct marketing."
(cf Rush affidavit paras 11-28, Oakley affidavit paras 11-15, and Witt affidavit paras 7-8).
154 I also note that the complaints were significant in number - exhibits A6, 18, 19 and 20 are bundles of some of the written complaints received by the Department, and Messrs Fry, Witt and Oakley all said that there were in fact many more complaints made to them orally by telephone (TS p 95 ll 20-22, p 239 ll 19-21 and p 269 l 43). The complaints in the exhibits were a combination of complaints from consumers and those from real estate agents who were not engaged in direct marketing.
155 The applicant submitted that of the complaints received by the respondent the majority are from real estate agents and building managers, with 37% attributable to individuals, and in view of the number of transactions in Queensland every day the number of complaints is minor. However I accept the evidence of the respondent's witnesses that there were many complaints by telephone. Further, I do not accept that, simply because a large number of complaints were from real estate agents and business managers, they were not "real" complaints as the applicant's submissions seem to imply, and I do not accept the submission of the applicant that the number of complaints received by the respondent would not justify a substantial overhaul to contractual arrangements in place since 1992.