ACCC concludes investigation into alleged anti-competitive conduct by Toll

16 June 2015

The Australian Competition and Consumer Commission has concluded its investigation into alleged anti-competitive agreements between Toll Holdings Limited (Toll) and the Transport Workers Union of Australia (the TWU), and does not consider that the alleged conduct contravenes the provisions of the Competition and Consumer Act 2010 (CCA).

The ACCC commenced its investigation following hearings of the Royal Commission into Trade Union Governance and Corruption. The Royal Commission received evidence about two separate confidential deeds entered into by Toll and the TWU, in the context of negotiations for the Toll-TWU Enterprise Agreement in 2011 and 2013.

The alleged conduct related to a provision in each of the deeds, under which Toll agreed to make annual payments to Transport Education Audit Compliance Health Organisation Limited (TEACHO), subject to the TWU meeting certain key performance indicators (KPIs).

The KPIs related to the TWU conducting audits, wage inspections or other compliance measures of one or more competitors of Toll, and TEACHO providing training for Toll’s employees and contractors with respect to general compliance measures (including log book compliance and occupational health and safety).

“The ACCC closely investigated whether the alleged conduct contravened the CCA, including whether the relevant provisions had the purpose, or had or were likely to have the effect, of substantially lessening competition,” ACCC Chairman Rod Sims said.

“After considering all of the information available to it, the ACCC concluded that the provisions in the two deeds did not have the purpose and were not likely to have the effect of substantially lessening competition, and did not otherwise contravene the CCA.”

The ACCC’s conclusion was based on a number of factors identified during the course of its investigation, including that:

  • the market for road freight transport is fragmented, with no single business having a significant share of the market, so it is not likely that the provisions could have had the effect of substantially lessening competition in that market;
  • none of the relevant provisions was given effect to, and hence there was no competitive harm from the conduct (a conclusion reached following enquiries with industry, including competitors of Toll); and
  • there was no evidence that the purpose of the relevant provisions was to substantially lessen competition.

In reaching this conclusion, the ACCC used its compulsory powers, conducted market enquiries and sought legal advice from Senior Counsel regarding the alleged conduct.

“While the ACCC considers the provisions of the deeds did not give rise to a contravention in this case, anti-competitive conduct is an enduring priority for the ACCC and industry is on notice that if we suspect any illegal conduct in this area, we will investigate and, where appropriate, take enforcement action,” Mr Sims said.

The ACCC does not generally comment on its investigations, but considers that making this announcement regarding the conclusion of this investigation was appropriate due to the public nature of the Royal Commission’s findings and previous public statements regarding the alleged conduct.

Background

The ACCC has previously taken action with respect to alleged anti-competitive conduct involving unions.  Most recently, on 20 November 2014, the ACCC instituted proceedings in the Federal Court against the Construction Forestry Mining and Energy Union, alleging it engaged, or attempted to engage, in secondary boycott conduct directed at Boral Resources (Vic) Pty Ltd and Alsafe Premix Concrete Pty Ltd, in breach of the CCA.

A copy of the ACCC’s media release in that matter can be found at: ACCC takes court action against the CFMEU alleging secondary boycott and undue harassment or coercion.
 

Release number: 
MR 103/15
Media enquiries: 
Media team - 1300 138 917

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