The High Court of Australia today handed down its decision in the Rural Press case, addressing three key matters.
The High Court unanimously overturned the decision of the Full Federal Court and found that an arrangement or understanding between Rural Press, Bridge Printing and Waikerie Printing House had a provision the purpose of which was to prevent, restrict or limit the supply of newspaper services by Waikerie Printing to readers and advertisers in the Mannum area of South Australia (an exclusionary provision) in contravention of the Trade Practices Act 1974.
The High Court affirmed the decision of the Full Court of the Federal Court that the arrangement or understanding had the purpose or effect of substantially lessening competition in the Murray Bridge Market for regional newspapers in contravention of the Act.
Finally, the High Court found that Rural Press and Bridge Printing did not breach the misuse of market power provisions of the Act as alleged by the ACCC. This decision also affirmed the decision of the Full Court of the Federal Court.
"The ACCC is disappointed that the High Court found that Rural Press did not misuse its market power [section 46] in this case, but the decision has further clarified the meaning of aspects of the misuse of market power provisions", ACCC Chairman, Mr Graeme Samuel, said today. "However the court has confirmed, as it held in Melways, that section 46 may be contravened where conduct is facilitated by a firm's substantial degree of market power.
"The ACCC is also disappointed that the decision has not addressed the Full Federal Court's decision that the leveraging of market power between markets does not constitute a misuse of market power.
"The ACCC is very pleased with the decision of the High Court in relation to arrangements or understandings which substantially lessen competition or which contain an exclusionary provision. The decision has provided important guidance on what it means to substantially lessen competition. In this case The River News, a family operated regional newspaper increased its circulation area and in doing so moved into a portion of the circulation of Rural Press' The Standard. It did so for nine months before the arrangement with Rural Press forced The River News back to its traditional circulation area. The number of papers it sold in The Standard's territory during that period was not large, the advertising revenue and profit it achieved were not large. But as the court found, the arrangement almost totally negated the beneficial effects of The River News' competitive behaviour over the period, such as a choice for readers and advertisers where before there had been none.
"The High Court has also provided most welcome guidance in relation to whether an arrangement or understanding contains an exclusionary provision. In particular, the court has held that the prohibition does not only apply to 'boycotts', where the purpose of the provision is to prevent, restrict or limit supply to competitors to the parties to the arrangement.
"This is the position that was taken by the ACCC in its submissions to the High Court and the ACCC is very pleased that the court has accepted those submissions".