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Thursday, 2 December 1965


Mr WHITLAM (Werriwa) .- I move -

That the following heading and new clauses be inserted in the Bill - " Part 111 a - Predatory Pricing and Monopolisation. " 34a. - (1.) A person who engages in persistent price cutting at a loss with the object of substantially damaging the business of a competitor or preventing a possible competitor from entering into competition is guilty of an offence. " (2.) The penalty for an offence against this section is -

(a)   in the case of an offence committed by a corporation - a fine not exceeding Ten thousand dollars; or

(b)   in any other case - a fine not exceeding Four thousand dollars or imprisonment for a term not exceeding six months. " 34b. - (1.) A person who engages in monopolisation is guilty of an offence. " (2.) In this section - monopolisation ' means acquiring or using monopoly power with the intention of preventing a person from entering or expanding a business, or using monopoly power in a manner that is unreasonable and detrimental to consumers of goods or services; monopoly power ' means the power to fix, or influence substantially, the market price of any kind of goods or services, or to prevent persons entering or expanding businesses. " (3.) The penalty for an offence against this section is -

(a)   in the case of an offence committed by a corporation - a fine not exceeding Ten thousand dollars; or

(b)   in any other case - a fine not exceeding Four thousand dollars or imprisonment for a term not exceeding six months.".

The objective of this amendment to the Bill is to restore two essential features of the proposals which were made by Sir Garfield Barwick, the former Attorney-General and present Chief Justice of Australia, for legislation on restrictive trade practices and monopolies and which were put to the

House on his behalf by the present Minister for Shipping and Transport (Mr. Freeth) on 6th December 1962. We members of the Labour Party believe that the importance of the proposals which were made three years ago is that they were the result of debates in the House and many discussions outside it, throughout 1960, 1961 and 1962, concerning restrictive trade practices and monopolies.

They were put to the House in a deliberate form three years ago. They were put to the people by the Government a year later. We did not oppose them. It was not until May of this year that the present Bill revealed that substantial divergences from the scheme put to the House and approved by the people had occurred. In particular, I quote-


Mr Stokes - " Not objected to by the people" would be a better phrase than " approved by the people ", would it not?


Mr WHITLAM - They were mentioned in the policy speech of the Prime Minister (Sir Robert Menzies) and the Labour Party made no criticism of them. This was not a matter of contention in the election campaign.

Incorporated in the speech that was made by the present Minister for Shipping and Transport on behalf of the then AttorneyGeneral was a document entitled " Elements of the Scheme". The concluding section of that document was headed " Inexcusably unlawful practices ". It reads -

The following practices are inexcusable, and therefore unregisterable -

(1)   persistent price cutting at a loss to drive a competitor out of business;

(2)   collusive tendering;

(3)   collusive bidding; and

(4)   monopolisation.

Monopolisation will be defined, broadly speaking, as acquiring or using monopoly power with the intention of preventing a person from entering or expanding a business, or in a manner that is unreasonable and detrimental to consumers of goods or services. Monopoly power, for this purpose, will be defined as the power to fix, or influence substantially, the market price of any kind of goods or services, or to prevent persons entering or expanding businesses.

Near the conclusion of the statement made on behalf of the former Attorney-General this passage appears -

So far I have been dealing with practices which can be conceived to be justifiable in particular cir cumstances, but 'there are other practices which are felt to be inexcusable in all circumstances. The scheme deals with these by describing them, as in the document which has been incorporated, in a list which I shall call list B, and by prohibiting them absolutely.

The Minister then repeated the four practices which I have already enumerated from the document which was incorporated in " Hansard ". He went on -

In connection with these practices, there is no question of registering a document or of the application to them by the tribunal of the criterion to which I have referred. They are forbidden in all circumstances. To carry on one of them will inevitably attract process in the ordinary courts, civil or criminal, or both. Here, usual rules will apply, and the elements of the offence will have to be made out by the Crown.

As to monopolisation, the scheme will spell out our existing legislation, removing known deficiencies and accommodating it to the decisions of the courts including the courts of the United States. Monopolisation will be defined . . .

The statement then repeated the words which I have already quoted from the incorporated document. Honorable members will notice, Sir, that only collusive tendering and collusive bidding are made offences under the terms of the Bill now before us and that predatory pricing and monopolisation are not. The former Attorney-General, who is now Chief Justice, made it explicit. In this statement made on his behalf three years ago the present Minister for Shipping and Transport reiterated that predatory pricing and monopolisation would be offences under the terms of the legisation then proposed to control restrictive trade practices and monopolisation. There was scarcely a mention in the present Attorney-General's second reading speech of the reasons for departing from the proposal put to us in this chamber three years ago and to the people two years ago. The Committee is entitled to an explanation of the reasons for the departure and to justification of the changes if such justification is possible.

It will be noted that the amendments circulated in my name repeat every word of the definition of monopolisation and spell out the practice of predatory pricing. This is not the first occasion during the consideration of this Bill at the Committee stage on which I have mentioned departures from the scheme proposed three years ago by the present Chief Justice. Why have these departures been made? We have not been given an explanation. The two practices in respect of which I am moving to have included in this Bill provisions in the originally proposed and endorsed form ought to be dealt with if the original scheme is to be carried out. Even though on earlier occasions the departures from the earlier proposals of the Chief Justice have remained unexplained and, despite our requests, unjustified, surely it is impossible on this occasion to overlook the basic departures from the original scheme. The occasion of the statement made by the present Minister for Shipping and Transport on behalf of the former Attorney-General was not the first occasion on which we were told that monopolisation and predatory pricing would be made offences. I quote in particular from a speech made by the present Attorney-General on 27th October 1960 in the discussion on an urgency proposal submitted by the honorable member for Newcastle (Mr. Jones) concerning tyres, batteries and motor accessories. The Minister at that time stated - the Pattman-Robinson Act of 1936, in the United States of America, which was part of the New Deal legislation in that country, was specifically directed towards making it a criminal offence to undersell a competitor in order to drive him out of business. The policy behind that Act has been actively pursued in the United States since 1936.

The present Attorney-General certainly led honorable members to believe that he was of the opinion in October 1960 that predatory pricing should be an offence iri this country as it has now been for 29 years in the United States. The former AttorneyGeneral was certainly of the opinion that predatory pricing and monopolisation also should be made offences under the terms of legislation designed to deal with restrictive trade practices. Why are these practices not being made offences under the terms of this Bill? Why has the scheme proposed by the former Attorney-General been diluted to this extent? Why has the present AttorneyGeneral departed from his previous view?







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