It's the end of an era; the air cargo cartel cases are finally all over. We were but freshfaced and thick-haired young lawyers when our airline clients first received ACCC investigation notices back in the mid noughties.
Cartel laws in Australia are complex and can be difficult for businesses to navigate. Since the air cargo cases' inception, cartel laws have been completely overhauled. And now there's call to completely overhaul them again, with the first changes floating around the House of Reps already.
The air cargo cartel was pretty straightforward, facts-wise. A heap of international airlines got together and agreed to fix prices for fuel surcharges on cargo flights. There was a global bust, and most airlines consented to very big penalties; around $100M altogether in Australia alone.
A bold few defended themselves, taking advantage of said complexity of Australian cartel laws. That's what has played out all the way to the High Court. The issue was that the cartel prohibition applied to `markets in Australia', and the question was whether the relevant markets were `in Australia'.
At first instance, the Federal Court said the markets were not in Australia because the acquisition of air cargo services typically happened overseas for air cargo headed to Australia. The relevant competition was all offshore.
The Full Federal Court, and then the High Court, disagreed. The vibe was that markets can exist in multiple places. Just because airlines were competing overseas didn't mean they weren't competing in Australia too. Shrodinger's cartel law. The key points in favour of a market in Australia related to the demand for air cargo services emanating from Australia.
That's all very interesting but as cartel laws stand right now, irrelevant. Current cartel laws don't involve a requirement that conduct relate to a market in Australia.
But that doesn't mean you should ignore this case. There are other provisions in the CCA involving consideration of markets `in Australia'; the merger rules and exclusive dealings are examples. Plus, the cartel amendments before Parliament right now would confine the current laws' application to markets in Australia. So we'll be back where we started if they pass. That means this decision has a lot of relevance for international businesses managing competition compliance.