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Thursday, 2 December 1965

Mr SNEDDEN (Bruce) . - I should like to answer in more detail than I did earlier the points that were raised by the honorable member for Moreton (Mr. Killen). Perhaps I should have done so earlier, but I thought it was unnecessary. I thought the honorable gentleman would pick up the point, and probably he did. However, the honorable member for Chisholm (Sir Wilfrid Kent Hughes) and I think the honorable member for McMillan (Mr. Buchanan) -

Mr Killen - It was the honorable member for Parramatta.

Mr SNEDDEN - The honorable member for Parramatta (Mr. Bowen) was putting a different point entirely. The honorable member for Macarthur (Mr. Jeff Bate) is the third member I was trying to think of. What the honorable member for Moreton was saying was that proposed subclause (I.) (c) could amount to a price control. That is what the honorable gentleman is concerned about. Let me make this point quite clear: There is an examinable practice when a person in a dominant position takes advantage of that position to impose prices or other terms or conditions of dealing upon another person, lt does not go both ways. The honorable member for McMillan thought it might. It goes only one way. As I said a moment ago, when a person in a dominant position imposes prices or other terms or conditions of dealing on a third person or a group of third persons, that is an examinable practice. It could go before the Tribunal. The Tribunal would need to be satisfied, first, that there was a dominant position, secondly about the imposition of prices, and thirdly about an imposition of prices which he could not have imposed if he had not been in a dominant position.

I do not think the honorable member for Moreton was concerned up to that point of time. What he says, in effect, is: " If this is so, and if the Tribunal decides that it is against the public interest it could then operate as a price control mechanism to fix the price at which the goods could be sold." Let me make this quite clear. It would be contrary to law, incapable of cure before the High Court, if the Tribunal sought to do that. All that the Tribunal has power to do is to order the person in the dominant position, who is imposing those prices, to cease imposing them. It cannot say to the party concerned: " Instead of charging price X you will charge price X minus ten ", or " Instead of charging price X you will charge price Y." It is not able to do so. If the Tribunal is not able to do that, it cannot be a price control mechanism. I can understand the honorable gentleman's concern about this matter but that is the fact of the matter based on the proper construction of the clause.

The honorable member for Parramatta (Mr. Bowen) would have liked to see instead of the words which refer merely to imposing prices some words which had reference to imposing unfair prices. He came to me and spoke to me about this and I told him then and there that when you spell out in a clause what is examinable you cannot insert in the clause the very thing that you are erecting the Tribunal to determine. When I put that point to the honorable member for Parramatta he accepted it, but he has raised it again tonight. Although the honorable member appeared to be satisfied earlier he said tonight that this provision should be made in clause 50 (3.) of the Bill. He wants to have a reference to " unfair ", or something of that kind. In relation to clause 50(3.) that is precisely what the Tribunal has to do. It has first of all to decide whether the person concerned is in a dominant position. It then has to decide whether that person has imposed prices. It then has to decide whether the prices imposed could not have been imposed if it were not for the dominant position. The Tribunal then has to ask: "What do we have to bear in mind? " It has to bear in mind the principle that the preservation and encouragement of competition must be in the public interest. Then it has to weigh the detriments of imposing prices against the tendencies towards advantage. I have jumped to a consideration of clause 50 and particularly sub-clause (3.), but it has a bearing on this point. If the Tribunal finds that what is being done is against the public interest it will make an order that the person in a dominant position will cease imposing prices. That is all it can say; it can do no more.

Sir Wilfrid Kent Hughes (CHISHOLM, VICTORIA) - Who else will impose a price if somebody else is selling its product?

Mr SNEDDEN - It is the imposition of a price which could not be imposed if the party concerned were not in that position. If the party concerned were the only party selling the product it does not necessarily impose the price. In fact the experience has been that in the majority of cases it does not impose a price which it could not impose if it were not in a dominant position. It just fixes a price in the ordinary course of business.

The point made by the honorable member for MacMillan (Mr. Buchanan) concerns research. Sometimes it is necessary to have a monopoly position in order to conduct research. One cannot prejudge such a situation. The honorable member would not want to do so, and neither would I. If somebody is in a dominant position, he may be engaging in research work which may be of the greatest benefit, and the cost of that research may be amortised through the prices charged. If that is the situation, the Tribunal would scarcely be looking to decide whether that person is imposing prices.

Mr Buchanan - And patents?

Mr SNEDDEN - That is a separate point. Patents are excluded from all the other practices, but not excluded from consideration in relation to monopolisation. The reason is that under the Patents Act certain privileges are given to a patent holder. This is sometimes described as a monopoly. I think case law would show that is not the fact, but let us distinguish it in that way. Certain rights are extended to the holder of a patent. He may be able to establish himself in a dominant position by buying a framework of patents. One would not want a system whereby advantage is given to inventiveness and genius to be used as the false base for a person to move into a dominant position and misuse it to the disadvantage of the rest of the community. In the majority of cases, a person in a dominant position is an artificial person, not a real person. So that in this case of patents, I think this is a proper provision in the legislation.

Progress reported.

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