George Brandis (Queensland, Liberal Party, Minister for the Arts and Sport) Share this | Hansard source

Thank you very much, Senator Murray. The reason the government will not be supporting proposed Democrat amendment (3) to create section 46(4B) is that, in view of the government’s amendment today in relation to predatory pricing, it is superfluous. Recruitment is not legally required under the government’s predatory pricing amendments. This is clearly set out in the explanatory memorandum.

I turn to Democrat amendment (4), which would define more tightly the circumstances in which a corporation might be held to take advantage of market power. Once again, in the government’s view and in my view this is unnecessary. As the High Court decided as long ago as 1989 in the case of Queensland Wire v BHP, the concept of taking advantage of market power is purely a functional relationship. To take advantage of market power—and this is well settled by the cases—merely means to use market power, that there must merely be a relationship of causality between the conduct and the effect. Therefore, in our view, to gloss that or to further complicate it is both unnecessary and, with respect, unhelpful.

Democrat amendment (5) proposes the amendment of the act by the insertion of a section 46AB for anticompetitive price discrimination and a section 46AC for anticompetitive geographic price discrimination. The government generally does not favour—and I think the opposition is of a common mind here; correct me if I am wrong, Senator Sherry—the re-introduction of price discrimination as a separate stand-alone cause of action under the Trade Practices Act. Senator Murray, you will remember that, some years ago, there was a prohibition on price discrimination in section 49 of the old act. That was repealed years ago, I think, in the time of the previous Labor government. There were several reasons for that. The main reasons are, first of all, that price discrimination is of itself no vice unless it is attended by other conduct which would be independently unlawful as misuse of market power under the existing section 46 and, more particularly, now that there are these additional predatory pricing protections in the act, as a result of the government amendment I moved earlier in the day, a fortiori it is not necessary now to have an additional cause of action for price discrimination.

I ask the rhetorical question, Senator Murray: what conduct can you imagine of price differentiation would or should be caught by your proposed section 46AB that would not already be unlawful, either under the existing section 46 or, more particularly, the augmented section 46 with the predatory pricing amendments that the government has made? The only conduct that would be unlawful would be cases of differential pricing where there was no relevant malign intent or no other economic circumstances which would make the price differentiation anticompetitive.

So, at best, with respect—and I know I have used this word to describe a number of your amendments, so forgive me for using it again—your amendment is otiose. But, if it has any additional meaning, it could only have a chilling effect on price competition, and price competition is one of the very things the Trade Practices Act exists to protect. So for that reason we do not support amendment (5) either.