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Practices Act 1974 (Cth) (TPA). The notices requested the parties to provide
documents and information about an alleged price fixing agreement in relation to
international air cargo services. The agreement is alleged to contravene section 45 of
the TPA, and the Notices employ the language of the deeming provision of section 45A,
of the TPA. Various heads of relief were sort. The primary ground was that the subject
of the “matters” listed in the Notices extend beyond conduct that could ever constitute a
contravention of the TPA. There were also challenges on administrative law grounds.
The airlines, the applicants, led evidence that was intended to “support the argument
that the Court could be satisfied that international air cargo services on routes into
Australia, and between two points outside Australia, are not competitively provided in a
market in Australia.”1
Before dealing with the arguments of the applicants Justice Middleton helpfully
summarises how to read section 45 of the TPA. He takes in account the facts of the
case, the wording of the Notices which rely upon section 45A, and the arguments of the
applicants. He interprets it as:
A corporation shall not make or give effect to an arrangement if a provision of the
arrangement has the purpose, or has or is likely to have the effect, of fixing the price for
international air cargo services supplied by the parties to the arrangement or by any of
them in competition with each other in any market in Australia in which a corporation
that is a party to the arrangement supplies those services.2
Concept of Market
• Market is a key concept in section 453
• There is a lot of case law on what a market is; however the HCA has cautioned
that attempts to define market too precisely are dangerous – NT Power
Generation Pty Ltd v Power and Water Authority (2004) 219 CLR 904
• Certain provisions of the Act, particularly in Pt IV, necessarily turn to a
significant degree on expressions which are not precise or formally
exact. One example is “market": there can be overlapping
markets with blurred limits and disagreements between bona
fide and reasonable experts about their definition, as in this case
• Considers Singapore Airlines Ltd v Taprobane Tours WA Pty Ltd (1991) 33
FCR 158 at 174 Note 1 at 24
1
Note 1 at 17.
2
Note 1 at 21.
3
Note 1 at 23.
4
Note 1 at 23.
Applicants’ submissions
• That all marketing, competition, negotiation and contracting for such services,
and particularly the setting of rates, occurs outside Australia. OR: “competitive
activity between airlines offering cargo service takes place at the ponit of origin
of the cargo.” Note 1 at 55
• They relied on a definition of market from Heydon J D, Trade Practices Law
that for a market to be in Australia “the buyers and sellers must engage in
transactions in Australia”. Underpinning the submission was that a market
must be taken to be located at the place of contracting, as opposed to the
place/s where the services are provided, and that place is where the air way
bill is cut – ie the port of origin. Note 1 at 56.
Dismissed
• Accepting that apart from outbound services, the place of contracting is not
Australia, this does not mean no marketing or negotiating or marketing occurs
in Australia in respect of all international air cargo services. Note 1 at 58. The
applicants also fail to eliminate any reasonable hypothesis which is
inconsistent with the market being wholly outside of Australia, even when
focussing solely on inbound services. Several reasons (Note 1 at 61):
• Part of the business of an international airline is unloading at the
destination
• Customers in Australia can book space on an aircraft over the
Internet, allowing them to make a booking at the destination port.
• Large freight forwarders have operations all over the world, as do
airlines
• It is an obligation of airline staff at the destination port to take
enquiries from customers about inbound shipments, deal with
complaints and trace lost shipments
• Further, it is not possible to conclude that the market for air cargo services into
Australia is not part of the international air cargo market, of which the Australia
market is, or may be, a part. Note 1 at 62
• Further it is possible that inbound and outbound services are sufficiently
connected to be complements. Note 1 at 63
Therefore…
Once it is accepted that the geographic location for a market is not confined to the place
where the contracts are entered, it is plain to see that the Notices do not relate to a
subject matter that extends beyond conduct that is capable of constituting a
contravention of the TPA, note 1 at 74.
The notices
• One ground of attack raised by the airlines was that the notices failed to
describe the market in Australia. His Honour accepted that “just because
services cover the movement of goods in or out of Australia, does not
necessarily indicate that there is a relevant market located in Australia in
respect of those services.”5 However, ultimately his Honour found that proper
construction of the notices do refer to a market in Australia.
• Should not be read in a overly technical or precious way – Melbourne Home of
Ford Pty Ltd v Trade Practices Commission (No 3) (1980) 47 FLR 163 at 175-
76. Note 1 at 47
• There is no need for the Notices to ‘plead’ the elements of the market in
Australia Note 1 at 51.
5
Note 1 at 36.
This line of reasoning is not pursued further, as this point is not in contention by
Emirates. It confines the challenge to “the validity of the instant Notices on the discrete
basis that the “matters” the subject of them extend beyond conduct that could ever
constitute a contravention of the Act.”9
6
Emirates v Australian Competition and Consumer Commission [2009] FCA 312 at 4.
7
Note 1 at 5.
8
Note 1 at 8.
9
Note 1 at 10.