The Australian Competition and Consumer Commission has filed proceedings in the Federal Court, Brisbane, against Eurong Beach Resort Limited, Mr Sidney Melksham, Jaigear Pty Ltd, Oser Pty Ltd and Ms Angela Kay Burger alleging predatory pricing and other conduct in contravention of the Trade Practices Act 1974.
In December 2000 a rival barge, the Manta Ray, began operating from Inskip Point near Rainbow Beach to Hook Point on the southern tip of Fraser Island. Before the Manta Ray's arrival, the only regular barge service on the Inskip Point-Hook Point route was operated by companies controlled by Mr Melksham. Those companies had held a virtual monopoly since 1989, apart from a brief period in late 1991 and early 1992.
The only really practical means of getting around Fraser Island, the world's largest sand island, is by 4WD vehicle. The barges operating on the Inskip Point route are the most popular way to take vehicles to the island.
Prior to the Manta Ray's arrival, the cost of travelling to Fraser Island from Rainbow Beach on one of the Melksham companies' barges was $70 per standard vehicle (return), except for contract customers, whom the ACCC alleges were charged lower prices on condition they exclusively used the services of the Melksham companies. Passengers cost an extra $4 per passenger, with trailers an additional $22 to $64 depending on the length.
Since December 2000 the Melksham companies have dropped their price so that it is now $20 or less, with passengers and trailers free. The ACCC alleges that this was done to damage or eliminate their competitor Manta Ray.
The ACCC further alleges that some of the Melksham companies have previously engaged in similar conduct against other barge operators on the Inskip Point route. The ACCC also alleges that the Melksham companies have engaged in conduct that contravenes sections 45, 47 and 60 of the Act. Section 45 prohibits contracts, arrangements or understandings that restrict dealings or affect competition. Section 47 prohibits exclusive dealing and section 60 prohibits undue harassment or coercion in connection with the supply of good or services.
The ACCC is seeking declarations, injunctions, pecuniary penalties, adverse publicity orders and the implementation of a trade practices compliance program.
The ACCC is also seeking interim undertakings or injunctions, restraining the respondents from:
- supplying barge services on the Inskip Point route at less than $34 return (for vehicle and passengers), or $17 one way (except in specified circumstances)
- alternatively, supplying or offering to supply barge services free of charge (except in specified circumstances)
- offering customers other benefits to use their barges
- enforcing any exclusive-use contracts
- operating more than two barges at one time on the Inskip Point route.
In addition, the ACCC is seeking an undertaking or interlocutory order that the respondents send letters to all contract customers advising them of the existence and nature of these proceedings, and advising such customers of the interim undertakings or orders.
This matter has been set down for a directions hearing on 3 October 2002.