Ron Boswell (Queensland, National Party) Share this | Hansard source

I rise to make a contribution in this place. I suppose I am one of the few people in this parliament who have ever actually had to trade—buy a product, sell at a higher price and make a profit. So I think I have had a fair bit of experience in the marketplace. The Trade Practices Legislation Amendment Bill 2008 that we have before us tonight seeks to change a number of important aspects of the Trade Practices Act including the last amendment that we moved—I think in September last year—when we established that market share should be the qualification. The government now wants to change that back to market power.

We tried this for years and years and were never successful. Since 2002 there has not been a successful case of predatory pricing carried forward by the ACCC. In fact, up until the stage when we brought this legislation through in 2007 the ACCC had more or less thrown in the towel because they recognised that they could not get a decision out of any court that would allow a conviction through for predatory pricing. What took place was the well-known Boral case, where Boral the brickmaker, or block maker, decided that they would go in and clean up the market in Victoria. There were two or three very competitive brickmakers down there—probably five, from memory. Boral went in very hard to take out a particular brickmaker who had developed a pretty smart machine that could turn out bricks a lot faster than Boral. The particular brickmaker was giving Boral a haircut. Boral virtually said that it did not matter what the price was; they told their reps to just go out and get the business.

That particular brickmaker rang me up and complained to me. At this stage Senator Brandis was not in the parliament—he is recognised as one of the most prominent trade practices solicitors but he was not here at the time. The particular brickmaker rang me up and said: ‘This is getting very serious. They have taken two of the competitors out and I am next.’ The ACCC warned Boral. The business environment picked up and the particular brickmaker survived. The ACCC then took Boral to court, bringing them in on a predatory pricing charge. Boral won that particular court action. The ACCC then appealed and the ACCC won. Boral then appealed to the High Court and the judgement came down, and Justice McHugh concluded:

Even though Boral drove down its prices in order to remove competition, this does not mean that it had a substantial degree of market power. That must be proved before there is a breach of section 46. Predatory pricing without a substantial degree of market power cannot result in a breach of section 46.

From that day forward I do not believe that there has been a successful predatory pricing court conviction by the ACCC. In fact I think they virtually threw in the towel and said that they did not have the case law to go before a court. As the court interpreted it, you would have to have so much power that you almost had to be—and I have used the term before—a Qantas cutting the fares for the Cairns Aero Club or something like that where they had a couple of little Barons that they were letting out. The power had to be immense. It almost had to be a monopoly power before you could even get into the court.

The National Party and the Liberal Party, the coalition, brought forward a change to the act. That change has been on foot for 12 months, and this bill seeks to change what is now called the Birdsville amendment from market share to market power. That is turning the clock back to where we were before. The bill gives a new criterion to the definition of taking advantage which assists the courts in their interpretation of the terms and makes jurisdictional changes so that section 46 is administered by the Federal Magistrates Court, and it legislates that one of the ACCC’s deputy chairmen have knowledge and experience in small business matters and strengthens the ACCC information gathering power under section 155.

All those things are admirable. I do not think that whether you are in a Magistrates Court or in the High Court is important, though I imagine that it would probably be better to be in the High Court, where the judges have had some experience with this particular act of parliament. But I do not think that it makes it any cheaper to go a Magistrates Court than it does to go to the High Court.