The Australian Competition and Consumer Commission today filed proceedings in the Federal Court, Sydney, against Baxter Healthcare Pty Ltd alleging that it misused its market power and engaged in exclusive dealing in the supply of medical products to certain Australian State and Territory health purchasing authorities in contravention of the Trade Practices Act 1974.
The ACCC alleges that Baxter has entered into long term, exclusive, bundled contracts of between three and five years to be the sole or primary supplier of large volume parenteral fluids (which are intravenous fluids), parenteral nutrition, irrigating solutions and peritoneal dialysis products, with each of the purchasing authorities in New South Wales, the Australian Capital Territory, Western Australia, South Australia and Queensland. Each State and Territory purchasing authority acquires these products for supply to publicly funded health facilities, including public hospitals.
The ACCC alleges that Baxter has taken advantage of its market power by structuring the terms on which it offers to enter into contracts for the supply of these products so that the State or Territory is required to acquire the products as a tied bundle of products if it wishes to have the benefit of significantly lower prices.
The ACCC alleges that this conduct was engaged in for the purpose of damaging Baxter's competitors, Fresenius Medical Care Australia Pty Ltd and Gambro Pty Ltd, in the relevant peritoneal dialysis market in contravention of section 46 of the Act.
The ACCC further alleges that the bundling of all of these products into long term exclusive contracts contravenes the exclusive dealing provisions of the Act. It is alleged that Baxter engaged in this conduct for the purpose and with the effect or likely effect of substantially lessening competition in the relevant peritoneal dialysis market, large volume parenteral fluids market, parenteral nutrition fluids market and/or the irrigating solutions market in contravention of section 47 of the Act.
The ACCC is seeking penalties against the company, findings of fact, declarations, injunctions, and orders for Baxter to review its trade practices compliance program.
A directions hearing has been set down for 9.30 am at 22 November 2002 in the Federal Court, Sydney, before Justice Wilcox.