Australian Experience of Antitrust Regulation—A Vindication of the per Se Approach

• Date: 01 June 1973
• Author: Warren Pengilley
• DOI: 10.1177/0003603X7301800213
• Published date: 01 June 1973
• Subject Matter: Article

AUSTRALIAN

EXPERIENCE

OF

ANTITRUST

REGULATION-A

VINDICATION OF THE

PER

SE

APPROACH

by

,V

ARREN

PENGILLEY·

Australia

has now seen about 5

years

of restrictive

trade

practices enforcement. This is almost the first period of

attempted

trade

practices control in

Australia

since the

1!106-

11 period.

1.

PRIOR

ENDEAVOURS

Australia

amere 5yean;

after

the formation of the Com-

monwealth entered into what was a distinctively

"North

American" approach to trade practices control.

The Irl06

Australian

Industries

Preservation

Act was

passed in terms distinctly similar to the Sherman Act of the

United States. The Irl06 Australian legislation declared

with

great

simplicity

that

"any

person who enters into

any

contract or engages in any combination in relation to

trade

or commerce with

other

countries or among the states

...

with

intent

to

restrain

trade

and commerce to the detriment of

the public" shall be guilty of an offense.' Treble damages

were also provided,"

The North American approach, however,

ran

into

diffi-

culties when confronted by the English

Privy

Council," The

,. Solicitor

and

Attorney of the Supreme Court of N.S.W. Aus-

tralia.

1Australian Industries Preservation Act 1906 Section 4.

2Australian Industries Preservation

Act

1906 Section 11.

SThen the highest appellate tribunal of the Australian Court

System along with most other then British Empire countries. The

Privy

Council still retains extensive jurisdiction as the final appellate

court of Australia though this is now mostly in respect of state

and

non-federal appeals only.

355

356

THE

ANTITRUST

BULLETIN

first Australian appeal to the

Privy

Council under the

Act"

found their Lordships holding

that

prices were

not

"unrea-

sonable" in a coal vend conspiracy involving price fixing,

quotas, boycotts and reciprocal exclusive arrangements with

a"shipping vend." Furthermore, it was held

that

the

"intent"

which had to be proven was a "sinister intent" to

injure

the

public, and

"the

public" which had to be injured included the

parties

to the agreement itself. The decision is one of naive

economics, to

say

the least. Their Lordships' comments on

"reasonable" prices were certainly unconvincing, as one would

think

that

(coal being at the

particular

time virtually the sole

source of bulk power) the incentive would be to charge what

the market could bear. No

trade

agreement has "sinister

intent" in the sense of their Lordships'

interpretation

of the

term

and clearly it would be virtually impossible to show

detriment to the

parties

in the agreement. Obviously such

agreement was to their benefit in

order

to obtain monopoly

power over the price of a product with an inelastic demand.

The

Privy

Council thus gave to Australia the background

case which was to give rise to innumerable

restraints

of

trade

to follow. The case duplicated

for

Australia the "pro-collu-

sion" views expressed and to be expressed by the

Privy

Council also in the cases of Canada" and New Zealand." The

Australian Act was amended in 1911 to remove the

"intent"

provision;

but

in view of the

Privy

Council decision in Coal

Vend.tsubsequent

Privy

Council

interpretation

of the New

• A.G. (Oommonwealth) v. Adelaide Steamship Co. Ltd., 18 CLR

30 (1911-13); All

ER

1120 (commonly known as "The Coal Vend

Case"). .

5See, for example, United Shoe Manufacturing 00. of Oanada v.

Brunet (1909), AC 330.

6See, R. v. Crown Milling Co. (1927), AC 394, giving interpreta-

tion to the Commercial Trusts Act of New Zealand similar to

that

given to Australian legislation and overruling New Zealand decisions

making conspiracies under such Act criminal and allowing an in-

jured

party

to sue for damages (Merchants Assoc. of N.Z. [Inc.]

and

Ors v. The King [1913], 32 NZLR 537; Fairbairn

Wright

Co. v.

Levin

d1

00.

[1915],34

NZLR

1).

7See note 4 above.