The Federal Court has dismissed the ACCC’s case against Ramsay Health Care Australia Pty Ltd (Ramsay) for alleged misuse of market power and exclusive dealing.
Ramsay operates Baringa Private Hospital, the only private hospital in Coffs Harbour. In 2015, Ramsay also operated Coffs Harbour Day Surgery, the only private day surgery in Coffs Harbour at that time.
The ACCC alleged that senior Ramsay executives told a group of surgeons planning to establish a competing private day surgery facility in Coffs Harbour that their access to operating theatre time at Baringa Private Hospital would be substantially reduced or withdrawn if they proceeded with their plans.
Whilst the Court found that Ramsay had a substantial degree of market power in the supply of private in-patient surgery services to surgeons in Coffs Harbour, the Court did not find there was sufficient evidence Ramsay made the alleged threats to surgeons.
“The ACCC brought this case because it raised important issues regarding the alleged conduct of a private hospital operator with a substantial degree of market power seeking to deter new entry, and what constitutes permissible competitive conduct in these circumstances,” ACCC Chair Rod Sims said.
“We will now carefully consider the judgment,” Mr Sims said.
Ramsay is wholly owned by Ramsay Health Care Limited, which is an ASX-listed healthcare provider with a reported revenue of $11.4 billion for the last financial year. Ramsay is Australia largest private hospital operator with about 70 hospitals and day surgeries nationwide. Each year, Ramsay facilities in Australia admit almost one million patients and account for more than half a million procedures.
This case was brought under the former misuse of market power provision. The statutory test including a ‘take advantage’ element that existed in the pre-Harper provision no longer applies.
The new section 46 applies to conduct from 6 November 2017 and prohibits a firm with a substantial degree of market power from engaging in conduct which has the purpose, effect or likely effect of substantially lessening competition.
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