Air New Zealand Cartel Conduct to be Appealed by the ACCC
Wednesday 21 January 2015 @ 11.08 a.m. | Trade & Commerce
The Australian Competition and Consumer Commission (ACCC) has lodged a notice to appeal against a recent Federal Court’s decision to dismiss proceedings against Air New Zealand and PT Garuda Indonesia in relation to alleged air cargo cartel conducts. The ACCC had accused the two airlines of contravening the then Trade Practices Act 1974 (Cth) by fixing the level of various surcharges to be applied to air cargo services supplied by a number of airlines between 2001 and 2006.
Background
The ACCC had commenced legal actions against a number of airlines in Australia including Qantas, Emirates, and British Airways. These airlines were fined almost $100 million for their part in an illegal global freight cartel. However, the law suits against Air New Zealand and Garuda were contested and ultimately dismissed by the Federal Court.
The Court found that while a number of price-fixing arrangements alleged by the ACCC were established in Australia, the cartel conduct itself did not take place in a ‘market in Australia’ in which the two airlines were competing.
The Appeal
ACCC Chairman Rod Sims said that the appeal from the ACCC will focus solely on the Court’s finding that there was no “market in Australia”. He reiterated that the ACCC will always pursue action against companies that engage in cartel conduct which could prove detrimental to Australian businesses and consumers.
"For this reason, it is important that we seek clarity on whether the [Competition and Consumer] Act applies to the collusive arrangements identified by the court."
Clarification of this issue is important given the context of the Harper Review Panel’s recommendation that cartel provisions should only apply to cartel conduct affecting goods or supplied in Australian markets. The ACCC’s submission in response to the Draft Report expresses concern that this recommended change may risk undermining the efficacy of the cartel provisions by requiring proof of “market” beyond reasonable doubt in criminal cases.
The current cartel provision in the Competition and Consumer Act 2010 (Cth)came into effect in 2009 and essentially introduced sanctions against cartel conduct. The provisions apply to contracts, arrangements, or understandings between parties in competition with each other, including price fixing, but there is no requirement that this competition be in a market in Australia.
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