Answer the following 2 problem questions:

by:

1. Identify core legal issues

2. Apply case-law to the facts to analyse/solve the problem/issues

3. Construct and critically analyse arguments

Use this structure by refferng to what is relevant in the question:

Civil Cartel Provisions

Section 45AJ (Make)

Contract, arrangement or understanding

Requisite elements

Blah! Blah! Blah!

Section 45AD

Cartel provision

Price fixing/Output restriction/market allocation/Big rigging

Blah! Blah! Blah!

Competition Condition

Blah! Blah! Blah!

Section 45AK (Give effect)

Contract, arrangement or understanding

See analysis above in relation to contract, arrangement or understanding.

Section 45AD

Cartel provision

Blah! Blah! Blah!

Criminal Cartel Provisions

Section 45AG (Make)

Contract, arrangement or understanding

Default element

Blah! Blah! Blah!

Section 45AD

Cartel provision

Default element

Blah! Blah! Blah!

Section 45AF (Give effect)

Contract, arrangement or understanding

Default element

Blah! Blah! Blah!

Section 45AD

Cartel provision

Default element

Blah! Blah! Blah!

Anti-Competitive Agreements

Section 45(1)(a) (Make)

Contract, arrangement or understanding

Requisite elements

Blah! Blah! Blah!

Purpose, effect or likely effect

Blah! Blah! Blah!

Market

Blah! Blah! Blah!

Substantial Lessening of Competition

Blah! Blah! Blah!

Section 45(1)(b) (Give effect)

Contract, arrangement or understanding

Requisite elements

Blah! Blah! Blah!

Purpose, effect or likely effect

Blah! Blah! Blah!

Market

Blah! Blah! Blah!

Substantial Lessening of Competition

Blah! Blah! Blah!

Section 45(1)(c) (Concerted practice)

Concerted practice

Blah! Blah! Blah!

Purpose, effect or likely effect

Blah! Blah! Blah!

Market

Blah! Blah! Blah!

Substantial Lessening of Competition

Blah! Blah! Blah!

Misuse of Market Power

Section 46(1)

Market

Blah! Blah! Blah!

Market Power

Blah! Blah! Blah!

Purpose, effect or likely effect

Blah! Blah! Blah!

Substantial Lessening of Competition

Blah! Blah! Blah!

Exclusive Dealing

Section 47(1)

The operative provision

Blah! Blah! Blah!

Section 47(2)(d)

Solus agreement

Blah! Blah! Blah!

Section 47(10)

Substantial lessening of competition

Blah! Blah! Blah!

use the following cases from this case list:

Cartels

Price Fixing (and contract, arrangement or understanding)

1. APCO Service Stations Pty Ltd v ACCC(2005) 159 FCR 452 [45] (Heerey, Hely and Gyles JJ) (unsuccessful price fixing of petrol, contract, arrangement or understanding);
2. ACCC v Leahy Petroleum Pty Ltd[2007] FCA 794 (price fixing of petrol, contract, arrangement or understanding);
3. ACCC v Mobil Oil Australia Ltd [1997] FCA 480 (unsuccessful case on price fixing of petrol and failure to establish an arrangement or understanding);
4. TPC v Leslievale Pty Ltd (1986) ATPR 40-687 (unsuccessful case on price fixing of petrol);
5. Morphett Arms Hotel Pty Ltd v TPC (1980) 30 ALR 88 (the very first price fixing case under the former Trade Practices Act 1974 (Cth);
6. Radio 2UE Sydney Pty Ltd v Stereo FM Pty Ltd (1983) 48 ALR 361 (unsuccessful price fixing case in relation to rate cards);
7. TPC v Email Ltd (1980) 31 ALR 53 (alleged price fixing of kilowatt hour meters);
8. ACCC v Colgate-Palmolive Pty Ltd (No 4) (2017) 353 ALR 460 (hub and spoke price fixing case) and see ACCC v Colgate-Palmolive Pty Ltd (No 2) [2016] FCA 528 andACCC v Colgate-Palmolive Pty Ltd [2016] FCA 676;
9. ACCC v Woolworths (South Australia) Pty Ltd (2003) 198 ALR 417 (Price fixing of takeaway alcoholic beverages);
10. ACCC v Roche Vitamins Australia Pty Ltd [2001] FCA 150 (price fixing of animal vitamins);
11. ACCC v Koyo Australia Pty Ltd[2013] FCA 1051 (Price fixing of ball and roller bearings); and
12. ACCC v Visy IndustriesHoldingsPty Ltd (No 3)(2007) 244 ALR 673 [297]-305] (Heerey J) (Price Fixing and market allocation).

Output Restriction

1. ACCC v Tasmanian Salmonid Growers Association Ltd[2003] FCA 788 [14] (Heerey J) (Output restriction);
2. ACCC v Australian Egg Corporation Ltd[2017] FCAFC 152 [29] (Besanko, Foster and Yates JJ);
3. ACCC v Liquorland (Australia) Pty Ltd [2006] FCA 826 (Preventing the supply of take-away liquor);
4. News Ltd v Australian Rugby Football League Ltd (Super League case) (1996) 139 ALR 193 (Preventing clubs joining the Super League); and
5. News Ltd v South Sydney District Rugby League Football Club Ltd (2003) 200 ALR 157 (Reducing competition to 14 football clubs).

Market Allocation

1. ACCC v Renegade Gas Pty Ltd[2014] FCA 1135 [1] (Gordon J) (market allocation of forklift gas customers);
2. TPC v TNT Australia Pty Ltd[1995] ATPR 41-375 [1]-[10] (Burchett J) (market allocate customers for logistics transport); and
3. ACCC v ABB Transmission and Distribution Ltd (No 2) (2002) 190 ALR 169 (Allocating customers in the power and distribution transformers industries).

Bid Rigging

1. Norcast S AR L v Bradken Ltd (No 2)(2013) 302 ALR 486 [263] (Gordon J) (contract, arrangement or understanding);
2. ACCC v TF Woollam and Sons Pty Ltd[2011] FCA 973 [7] (Logan J);
3. ACCC v Yazaki Corp (No 2) (2015) 332 ALR 396 (Rigging bids in the supply of wire harnesses); and
4. ACCC v First Class Slate Roofing Pty Ltd [2022] FCA 1093

Criminal Cartels

1. CDPP v Kawasaki Kisen Kaisha Ltd[2019] FCA 1170 (Justice Wigney) (criminal cartel) (Shipping case);
2. DPP v Nippon Yusen Kabushiki Kaisha[2017] FCA 876 [204]-[300] (Wigney J) (Shipping case);
3. DPP v Wallenius Wilhelmsen Ocean AS (2021) 386 ALR 98 (Shipping case);
4. Director of Public Prosecutions (DPP) (Cth) v Vina Money Transfer Pty Ltd [2022] FCA 665;
5. Commonwealth Director of Public Prosecutions v Citigroup Global Markets Australia Pty Ltd (No 1 - Indictment) [2021] FCA 757;
6. CDPP v Country Care Group Pty Ltd Accused Acquitted (2 June 2021);
7. CDPP v Alkaloids of Australia Pty Ltd NSD1196/202; and
8. CDPP v Christopher Joyce NSD1149/2021.

Section 45

1. Seven Network News Ltd v News Ltd[2007] FCA 1062
2. ACCC v Cement Australia Pty Ltd (2013) 310 ALR 165 (Warning complex litigation)
3. Dowling v Dalgety Australia Ltd (1992) 106 ALR 75;
4. TPC v TNT Management Pty Ltd (Tradestock case) (1985) 58 ALR 423;
5. Stationers Supply Pty Ltd v Victorian Authorised Newsagents Associated Limited (1993) 44 FCR 35 (purpose or effect of substantially lessening competition (ss 45 and 47);
6. For concerted practices (i.e. s 45(1)(c) of the CCA), there is no case to date. As advised in class, see: ACCC,Interim Guidelines on Concerted Practices(2017) at the ACCC website; and
7. Lawn Solutions Australia Group Pty Ltd Enforceable Undertaking (18 November 2022).

Section 46

1. Rural Press Limited v Australian Competition and Consumer Commission[2003] HCA 75 (market power, commercial threats)
2. Queensland Wire Industries v BHP(1989) 167 CLR 177 (constructive refusal to supply)
3. ACCC v Safeway Stores Pty Ltd(2003) 198 ALR 657 [301] (Heerey and Sackville JJ). (Refusal to acquire)
4. Melway Publishing Pty Ltd v Robert Hicks Pty Ltd[2001] HCA 13 (Market power, refusal to supply)
5. Boral Besser Masonry Limited (now Boral Masonry Ltd) v ACCC [2003] HCA 5 (Market power, predatory pricing)

Section 47

1. O'Brien Glass Industries Ltd v Cool & Sons Pty Ltd(1983) 77 FLR 441 (Market definition; exclusive dealing, and minimum quantities condition)
2. Monroe Topple & Associates Pty Ltd v Institute of Chartered Accountants in Australia[2002] FCAFC 197 [104] (Heerey J) (meaning of 'on the condition')
3. Universal Music Australia Pty Ltd v ACCC(2003) 201 ALR 636 [165]-[274] (Wilcox, French and Gyles JJ) (solus agreement, purpose or effect of SLC, and also a misuse of market power)
4. ACCC v Baxter Healthcare Pty Ltd (No 2)(2008) 249 ALR 674 [193]-[257] (Mansfield J) (tying agreement)
5. Castlemaine Tooheys Ltd v Williams & Hodgson Transport Pty Ltd[1986] HCA 72; (1986) 162 CLR 395 Exclusive dealing (third line forcing)

Section 48

1. ACCC v Eternal Beauty Products Pty Ltd[2012] FCA 1124
2. ACCC v Jurlique International Pty Ltd[2007] FCA 79
3. ACCC v High Adventure Pty Ltd[2005] FCA 762
4. ACCC v Oobi Baby Pty Ltd[2008] FCA 1488 [1]-[12] (Finkelstein J)

Section 50

1. ACCC v Metcash Trading Ltd(2011) 284 ALR 662 [131]-[146] (Yates J, with whom Finn and Buchanan JJ agreed).
2. TPC v AMH Pty Ltd(1988) 83 ALR 299 [119] (Wilcox J) (good for market definition).
3. Australian Gas Light Company (ACN 052 167 405) v Australian Competition & Consumer Commission (No. 3)[2003] FCA 1525 - Mergers - declaration that merger would not SLC - declaration sought after ACCC refused to provide informal clearance
4. Arnotts Limited v TPC(1990) 97 ALR 555 - Merger - market definition - dominance (different types of biscuits) - Trial: TPC v Arnotts (1990) 93 ALR 657

Accessorial Liability (ss 75B/76(1)(c)-(f))

1. Yorke v Lucas(1985) 158 CLR 661 (this is an Australian Consumer Law case, but the legal principles also apply to Australian Competition Law).

Attempted to contravene

1. ACCC v Tubemakers of Australia Pty Ltd(1983) 47 ALR 719 (attempt to fix the price of steel products);
2. TPC v Parkfield Operations Pty Ltd(1985) 62 ALR 267, 273 (Bowen CJ, Smithers and Morling JJ) (Attempted price fixing);
3. ACCC v Flight Centre Travel Group Ltd (2016) 339 ALR 242 (attempt to fix the price of air fares); and
4. ACCC v BlueScope Steel Limited (No 5) [2022] FCA 1475 (attempt to fix the price of steel products. Please note penalty judgment still to be handed down).

Note: in relation to the following problem scenarios, provide quotes from each scenario to the analysis or the answer

PROBLEM QUESTION 1:

Question 1 Trump Petroleum Pty Ltd (Trump) owns and operates a service station in Strathfield, Sydney. Biden Petroleum Pty Ltd (Biden), Obama Petroleum Pty Ltd (Obama) and Clinton Petroleum Pty Ltd (Clinton), all own and operate service stations in the surrounding suburbs of Homebush, Burwood and Enfield, respectively. Bush Petroleum Pty Ltd (Bush) is a wholesaler of petrol and supplies all services stations with petrol in the area. The competition between the service station owners in the area is fierce. Service station owners often engage in price wars and tit-for-tat strategies, which sometimes can go on for months. During these periods, the profits made on selling petrol is marginal (usually 3 cpl) and service station owners rely on selling other in-store products. Customers in the area often paid around $1.50 per litre, except on holidays and on weekends, where the price of petrol rises to around $1.70 per litre. During a price war, customers in the area only pay around $1.30 per litre. Over the years, the fierce competition in the area prompted the owner of Trump, Donald Trump (Mr Trump) to engage in an aggressive pricing strategy. Mr Trump hoped that the strategy would finally give his business the 'upper hand' in the market. The strategy was to drop the price of petrol to $1.00 per litre and maintain that price for a period of twelve months. Mr Trump was confident that the strategy would force Biden, Obama and Clinton out of business. However, after ten months of engaging in the strategy, only Biden's service station goes into liquidation. Consequently, the Biden service station site goes up for public sale for $50,000. Obama makes an offer to buy the site at $52,000, and Clinton makes an offer to buy the site for $54,000. Upon learning about these offers, Trump makes an offer of a $250,000 and was successful in acquiring the service station site at Homebush. Shortly after the sale, Mr Trump has the following conversation with his assistance manager, named John Trump Jr (Mr Trump Jr): Mr Trump: Now I want you to go to the Homebush site and make sure that it is secure. Mr Trump Jr: Sure thing dad. I will go first thing tomorrow morning. Mr Trump: No. I want you to go right now and start work on building a wall around the site. Make sure it is so high that no-one can get in or see inside the site. Can you do that? Mr Trump Jr: Sure. Mr Trump: I then want you to go and buy a large padlock and lock up the site, as no-one is going to enter it, at least in my lifetime. Mr Trump Jr: Sounds good dad. I will go to Bunnings right away. Mr Trump: I want you to listen to me very carefully. We are to build a wall and the people who live in the area are going to pay for it. God bless America. [Conversation ended] After learning about Trump's aggressive strategy, the owner of Bush, George Bush (Mr Bush) called Mr Trump and they had a conversation to the following effect: Mr Bush: Hi Donald. I heard you have been heavily discounting petrol. Mr Trump: Yeah, I have - so what. Mr Bush: I have been getting all sorts of complaints from your competitors. You have to stop discounting now. You are ruining it for everyone. Mr Trump: You know what. You are a rude person. That is a nasty thing to say. They all thought I would not survive the past 10 months, but I did. Mr Bush: And where did it leave you. Listen, I have to tell you that from now on you need to sell your fuel at $1.50 or above, or else. Mr Trump: Or else what? Mr Bush: Or else you won't be receiving any more promotional discounts on fuel from us. Mr Trump: Is that a threat? Are you threating me? Mr Bush: It is not a threat. It is going to be a fact. This is your only warning. There is also one more thing. We have new conditions of supply. From now on when you buy your petrol from us, you cannot buy any fuel from any other supplier, and you must also buy all of your motor engine oil from us as-well. This way everyone is happy. Mr Trump: Well, I cannot say that I am happy with this, but it looks like I have no other choice. Mr Bush: That is right Donald. You have no choice. Mr Trump: You know what George. I don't like you. You are like that other guy in the business, Marco Rubio. You both have low energy. Goodbye George and God bless America. [Phone call ended] In the next month, Trump abandoned its strategy, as it became clear that Obama and Clinton were going to remain in the market. What made matters worse was that two months later three new service stations started selling petrol in the outer regions of the area, in Ashfield, Burwood Heights and Belmore. Trump made several attempts to recoup its lost profits, but each time it attempted to increase the price of petrol, it lost customers to the other service stations in the area, especially the newly opened service stations, which had larger sites, and adjacent car washing or mechanic services.

QUESTIONS:

1.1 Advise Trump whether it has contravened any of the provisions of the Competition and Consumer Act 2010 (Cth)

1.2 Advise Bush whether it has contravened any of the provisions of the Competition and Consumer Act 2010 (Cth)

PROBLEM QUESTION 2:

Question 2 Ford Motors Pty Ltd (Ford) is the manufacturer and exclusive wholesale supplier of Ford motor vehicles in Australia. Nixon Motors Pty Ltd (Nixon) carried on business as a major supplier of Ford motor vehicles in Australia. Other major suppliers of Ford motor vehicles in Australia include Carter Motors Pty Ltd (Carter), Reagan Motors Pty Ltd (Reagan), and Johnson Motors (Johnson). In January 2024, a severe price war occurred within the Ford motor vehicle market in Australia. This 'war' was characterised by fierce price competition between Nixon, Carter, Reagan and Johnson. Between February and March 2024, the price war caused prices to fall as low as cost price. In response, the owner of Ford, Gerald Ford (Mr Ford) arranged a meeting at his house in Mosman, Sydney with all the suppliers of the Ford cars (the Meeting). Amongst those who attended were Richard Nixon (Mr Nixon), the owner of Nixon, Jimmy Carter (Mr Carter), the owner of Carter, Ronald Reagan (Mr Reagan) the owner of Reagan, and Lyndon Johnson (Mr Johnson), the owner of Johnson. Other attendees included some smaller suppliers of Ford motor vehicles, namely George Washington (Mr Washington) the owner of Washington Motors Pty Ltd (Washington), Thomas Jefferson (Mr Jefferson) the owner of Jefferson Motors Pty Ltd (Jefferson), Abraham Lincoln (Mr Lincoln), the owner of Lincoln Motors Pty Ltd (Lincoln) and Theodore Roosevelt (Mr Roosevelt), the owner of Roosevelt Motors Pty Ltd (Roosevelt). At the Meeting, Mr Ford opened the discussion by welcoming everyone. He then informed the attendees that the discussion was to be on a strictly confidential basis and that no-one should repeat what was said in the Meeting. Everyone agreed and the following discussion took place (over some cigars and brandy):

Mr Nixon: This price war must stop right now. We are all losing money.

Mr Carter: You are the one who started it in the first place Richard. [in an angry voice] Mr Reagan: But it was you Jimmy who was the one to first decide to drop your prices to cost level. Mr Ford: Gentlemen. Please. There is no need to argue. I am sure that we, as reasonable men, can all come to a solution here. Mr Johnson: This is a waste of time. There is no solution. How can I trust anyone here.

Mr Ford: I understand your concern Lyndon, but I think that I have a solution to our little problem here which should make everyone happy. [There is an uncomfortable pause in the conversation, while Mr Ford take a long puff of his cigar] What I suggest is this. You will all agree to sell the Ford Falcon at $65,000 and the price of the Ford Mustang must be maintained above $150,000. Mr Johnson: The prices sound good to me Gerald, but you have not provided me with any reason why I should trust anyone in this room.

Mr Ford: The reason is this. You will all agree here and now on what I proposed. To ensure that this arrangement works, I will hire an accountant to monitor your books. Now if any of you cheat on our little arrangement, you will have to pay a fine of $100,000. How does that sound to all of you? [Everyone in the room nods their heads in approval, except for Mr Washington, Mr Jefferson, Mr Lincoln and Mr Roosevelt, who left the meeting immediately. When leaving the room, Mr Lincoln mumbled something under his breath about freedoms and trade practices, but only Mr Ford heard him]

Mr Nixon: Well gentleman, now that the 'small players' have left the room. What should we do about them? Mr Ford: How about another cigar Richard. Mr Johnson: I don't trust them for a second. Did you see the look Abraham gave as he left? And as for the other three, none of them are 'team' players. As soon as we turn our backs, they will start dropping their prices like flies. Mr Reagan: Listen Lyndon, I might have a solution for the little problem here with our 'smaller friends'. What if we were to push them out of the market. Mr Carter: How? Mr Reagan: Well, it is simple. Gerald, you should stop supplying them with Ford motor vehicles. I mean find a reason to tear up your supply contracts with them.

Mr Ford: I am not going to do that. It will cost me a lot of money in legal fees, and I might end up in court for the next two years. [There is another moment of uncomfortable silence in the room, while Mr Nixon takes a swig of his brandy and lights up another cigar] Mr Nixon: I have it. We target their customers. Mr Reagan: What? Are you kidding? Mr Nixon: No. I am serious. Ronald you target Washington's customers. Jimmy you target Jefferson's customers. Lyndon you target Lincoln's customers and I will go after Roosevelt's customers. Mr Reagan: A brilliant idea. I was just thinking the same. Mr Carter: Great minds think alike. Well will wipe them out in no time. Mr Nixon: And of course, it goes without saying that none of us go after each other's customers, especially major customers. If you take one of our major customers, you need to compensate for it.

Mr Carter: Agreed. Mr Reagan: Agreed. Mr Carter: Agreed. [Mr Ford remains silent, but nods his head in approval]. Mr Ford: Gentleman. There is one last thing I think we should agree on and that is the name for our new alliance. Mr Reagan: How about the 'Gentleman's Club'? [Everyone stands up in the smoke filled room with grins on their faces and raises their glasses of brandy.] Mr Ford: To the Gentleman's Club. All reply: To the Gentleman's Club. [The Meeting ends] One week later, Mr Nixon instructed his staff to implement what the Gentleman's Club agreed to at the Meeting. In the following three weeks, Mr Carter, Mr Reagan and Mr Johnson all did the same. Four weeks after the Meeting, the President of the Australian Motor Vehicle Teamsters Union (Teamsters), Jimmy Hoffa (Mr Hoffa) called a meeting with all of its members of the Teamsters (the Teamsters Meeting). At the Teamsters Meeting, Mr Hoffa informed its members that none of the employees of Washington, Jefferson, Lincoln and Roosevelt were members of the Teamsters. The Vice-President of the Teamsters, Frank Fitzsimmons (Mr Fitzs) agreed and said that something had to be done about it. The conversation at the Teamsters Meeting was as follows: Mr Hoffa: I have just been informed by my friend, Gerald Ford that none of the employees at Washington, Jefferson, Lincoln and Roosevelt are union members. Mr Fitzs: Shame on them. [Yells] Mr Hoffa: We need to join together and use our strength to show them that we are strong and that we mean business. Mr Fitzs: Damn right Mr President. We mean business. Mr Hoffa: I just spoke to Mr Washington, Mr Jefferson, Mr Lincoln and Mr Roosevelt and none of them will listen to me. They just don't understand the power of the worker. Mr Fitzs: But we will show them. [Raising his fist in the air] Mr Hoffa: That is right. We will show them. From 9am tomorrow morning, there will be a 'black ban' on those car dealers. Mr Fitzs: Yes. [Yells] Mr Hoffa: We are going to form a picket line at each location. I want to see at least one hundred union members at each car yard. You will not allow anyone to enter the car yard. That means no employees, no managers, no deliveries of Ford vehicles, nothing. I don't want to see one Ford car being delivered to any of those businesses for the rest of the year. I don't even want to see a fly get into those car yards. [in a raised voice] Mr Fitzs: That is right. Not even a fly. Mr Hoffa: I want to you pack your things and stay there day and night. Bring your families, especially your children. We are going to show them. [in a raised voice] Mr Fitzs: Show them. Mr Hoffa: We are going to hurt them. [in a raised voice] Mr Fitzs: Hurt them. Mr Hoffa: We are going to make sure their businesses suffer. [in a raised voice] Mr Fitzs: Make them suffer. Mr Hoffa: We are going to hit them where it hurts. In the hip pocket. [in a raised voice] Mr Fitzs: In the hip pocket. Mr Hoffa: We are going to let them know that nobody messes around with us. [in a raised voice] Mr Fitzs: Nobody messes with us. Mr Hoffa: And always remember. Don't let any man or woman into your cab, your home, or your heart, unless he or she is a friend of labor. [in a calm voice] Mr Fitzs: A friend of labour. We love you, Jimmy. [shouts] [Over two thousand Teamsters members stand up from their seats and start cheering. Jimmy. Jimmy. Jimmy.] [The Teamsters Meeting end] At 9am the next morning, over two thousand Teamsters set up picket lines and block the entrances and exits of each of the Washington, Jefferson, Lincoln and Roosevelt car yards. The blockage lasts for six months, and those car companies lose hundreds of thousands of dollars in car sales.

2.1 Advise Ford whether it has contravened any of the provisions of the Competition and Consumer Act 2010 (Cth). Also, advice Mr Ford on whether he could be held liable for being involved in any contravening conduct of Ford and what he could do to avoid liability

2.2 Advise the Teamsters whether it has contravened any of the provisions of the Competition and Consumer Act 2010 (Cth) (CCA). Also, advise the Teamster whether its conduct would be permitted under the CCA