ACCC v Australia and New Zealand Banking Group Ltd [2015] FCAFC 103: Federal Court Rejects ACCC Appeal
Friday 7 August 2015 @ 9.17 a.m. | Legal Research | Trade & Commerce
In the judgment of ACCC v Australia and New Zealand Banking Group Ltd [2015] FCAFC 103 (31 July 2015), the Full Court of the Federal Court of Australia has dismissed an appeal by the Australian Competition and Consumer Commission (the ACCC) against a decision of the Federal Court which dismissed the ACCC’s price fixing allegations against Australia and New Zealand Banking Group Ltd (ANZ).
These proceedings concerned allegations by the ACCC that ANZ had made and given effect to a price fixing agreement, and allege that they are in breach of ss 45A, 45(2)(a)(ii) and 45(2)(b)(ii) of the then Trade Practices Act 1974 (Cth) (the Act) [now called the Competition and Consumer Act 2010 (Cth)].
Background to the Case
The ACCC alleged that in 2004, ANZ sought to limit the amount of a refund a mortgage broker, Mortgage Refunds Pty Ltd, could provide to its customers in respect of arranging ANZ home loans. The ACCC’s case was that this amounted to a price fixing agreement in breach of the Act.
It was alleged that ANZ made and gave effect to an agreement where it would only allow Mortgage Refunds to continue to be accredited to offer ANZ mortgage products if it agreed to limit any refund it paid to its customers to $600, which would allow ANZ branches to match the deal if they chose to waive the ANZ loan establishment fee.
The ACCC instituted proceedings against ANZ in August 2007. The trial took place between 26 March and 5 April 2012, and judgment at first instance was given on 18 November 2013. The appeal hearing took place on 14 and 15 August 2014.
Allegations made by the ACCC
The ACCC alleged that this amounted to price fixing because ANZ and Mortgage Refunds were competitors in the market for the provision of loan arrangement services to customers. The judgment said at paras [3] and [4]:
"Critical to the ACCC’s case was the allegation that ANZ and Mortgage Refunds competed against each other, and other banks and brokers, in the market for the supply of loan arrangement services.
The ACCC was unsuccessful. The primary judge found that ANZ, through its branches and other internal channels, did not participate in any market in which brokers, such as those engaged by Mortgage Refunds, provided loan arrangement services to potential borrowers. ANZ was not, in any relevant sense, in competition with Mortgage Refunds. Therefore, s 45A of the Act was not engaged."
On 18 November 2013, the Federal Court found that ANZ did not participate in a market for the provision of loan arrangement services and consequently that ANZ and Mortgage Refunds were not competitors in this market.
As a result, ANZ’s conduct was found not to amount to a price fixing agreement and Dowsett J dismissed the ACCC’s application.
Full Court Appeal Dismissal
The Full Court dismissed the ACCC’s appeal, and in concluding at paras [315] and [316], commented that:
"The ACCC has failed to demonstrate any error on the part of the primary judge.
The appeal should be dismissed with costs. The cross-appeal should be allowed with costs. There is no need for any further or consequential orders on the cross-appeal."
Reaction from the ACCC
ACCC Chairman Rod Sims said of the proceedings:
“The ACCC brought these proceedings because of its concern that what should have been a competitive rivalry for new customers was undermined by ANZ’s decision to restrain the broker’s ability to compete on price. Although the Full Court did not accept that ANZ was in competition with independent mortgage brokers, it is important to note the Full Court observed that it is possible for internal and external distribution channels to be in competition, and that each case needs to be considered on its own facts and circumstances. Competition drives innovation and delivers lower prices and better products to consumers. Impeding competition is a serious matter that damages consumers, businesses, and the entire economy. For this reason, pursuing anti-competitive agreements and practices remains one of the ACCC’s enduring enforcement priorities. The ACCC will carefully consider the judgment.”
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Sources:
ACCC unsuccessful in appeal from judgment dismissing price fixing allegations against ANZ – ACCC Media Release MR 139/15
ACCC v Australia and New Zealand Banking Group Ltd [2015] FCAFC 103 (31 July 2015)
