The Federal Court has today dismissed proceedings brought by the Australian Competition and Consumer Commission alleging that Australian and New Zealand Banking Group Limited (ANZ) had breached the price fixing provisions of the Trade Practices Act 1974 (the Act), now Competition and Consumer Act 2010 (CCA).
The proceedings related to ANZ’s conduct in 2004 requiring Mortgage Refunds Pty Ltd (Mortgage Refunds) to agree to limit the amount of the refund it could provide to its customers in respect of arranging ANZ home loans.
It was alleged that ANZ made and gave effect to an agreement where it would only allow Mortgage Refunds to continue to be accredited to offer ANZ mortgage products if it agreed to limit any refund it paid to its customers to $600, which would allow ANZ branches to match the deal if they chose to waive the ANZ loan establishment fee.
The ACCC alleged that this amounted to price fixing because ANZ and Mortgage Refunds were competitors in the market for the provision of loan arrangement services. The Court found that ANZ did not participate in a market for the provision of loan arrangement services and consequently that ANZ and Mortgage Refunds were not competitors in this market. As a result, ANZ’s conduct was found not to amount to a price fixing agreement.
Rod Sims, ACCC Chairman, said “Anti-competitive agreements between competitors are a priority for the ACCC because when businesses seek to fix, control or maintain the prices, rebates or discounts offered by their competitors, this can prevent or hinder competition, forcing up prices and reducing choices for consumers.”
“In this case, the ACCC was concerned that the conduct affected price competition, which would ultimately impact upon consumers.”
“It was especially significant that this conduct took place in the market for mortgage arrangement services, as home loans are a major cost for many people,” Mr Sims said.
The judgment is extensive, and the ACCC will give it careful consideration.
The Australian Competition and Consumer Commission instituted proceedings against the ANZ Bank in August 2007 in the Brisbane Federal Court. The case was fully contested with a number challenges along the way, and the trial took place between 26 March and 5 April 2012.
The ACCC alleged that in 2004 the ANZ Bank sought to limit the amount of a refund a mortgage broker, Mortgage Refunds Pty Ltd, could provide to its customers in respect of arranging ANZ home loans, in contravention of section 45 of the Act, by operation of section 45A which deems price fixing agreements to be in breach of section 45.