The Australian Competition and Consumer Commission has filed a Notice of Appeal in the Federal Court appealing the 22 September 1999 judgment of Justice Heerey who decided that Boral Limited and Boral Besser Masonry Limited did not breach section 46 of the Trade Practices Act 1974.
In March 1998 the ACCC instituted proceedings against Boral Limited and its subsidiary Boral Besser Masonry Limited alleging misuse of market power. The ACCC alleged that Boral Besser Masonry Limited reduced the prices at which it offered to supply concrete masonry products in Melbourne below its manufacturing costs and continued to do so in order to drive out an efficient new independent operator, C&M Bricks Pty Ltd. C&M Bricks, a small rural Victorian business, started up in Melbourne in 1994 with highly efficient, 'state of the art' technology.
The ACCC alleged that Boral Besser Masonry Ltd's purpose in engaging in this conduct was, amongst other things, to unlawfully damage competition in the manufacturing and supply of concrete masonry products, in particular C&M Bricks Pty Ltd.
Justice Heerey found that Boral Besser Masonry Ltd did engage in below cost pricing for the purpose of deterring new entrants and driving competitors out of the market. However the ACCC did not satisfy the Court that Boral Besser Masonry Ltd had 'a substantial degree of power' in the Melbourne concrete masonry market which is an essential element for establishing a contravention of section 46. The Court found that the relevant market was the Melbourne metropolitan market for wall and paving material.
The ACCC has decided to appeal these findings, and in so doing, elucidate the application of section 46 to predatory conduct through judicial clarification by the Full Court of the Federal Court.
