On 21 March 2016, the Full Federal Court overturned the first instance decision as to whether an air cargo cartel occurred in a 'market in Australia'.
By way of background, in October 2014, the Federal Court determined in ACCC v Air New Zealand that an alleged air cargo cartel in respect of surcharges on flights from Hong Kong to Australia did not occur in a "market in Australia" and was therefore not subject to the Trade Practices Act 1974 (Cth) (TPA). That decision is summarised in our earlier article linked here.
In a 2:1 decision, the Full Court overturned the first instance decision, finding that the relevant conduct had occurred in a market in Australia. In reaching this finding, the Full Court identified a number of reasons that the market was 'in Australia' including that the services were supplied in part in Australia and that shippers who, as a matter of economic reality were customers of the airlines, were located in Australia.
The first instance judgment in Australia had concluded that apart from the 'market in Australia' issue, the conduct of the carriers, Air New Zealand Limited and P T Garuda Indonesia Ltd was in breach of the price fixing provisions of the TPA. A such, in the absence of a further appeal, those carriers are likely to receive a penalty to be determined by a Court. Those carriers will now consider whether to appeal the matter further.
The price fixing prohibitions in the Competition and Consumer Act 2010 (CCA) have been amended since the conduct the subject of this proceeding such that this case has limited direct precedential value. However, there remains a question as to whether, under the new cartel provisions in the CCA, it is necessary that there be any nexus between the anti-competitive conduct and Australia. If and when that issue arises, this case will likely be of relevance.
The position in Australia has followed the opposite path to Europe, where in December 2015 the General Court accepted the appeal of 20 carriers and annulled the initial judgment of the European Commission to fine those carriers.