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Wednesday, 14 August 1974
Page: 922


Senator GREENWOOD (Victoria) - I move:

In sub-clause ( I ). after 'shall not' insert' wilfully

The insertion of this word may seem to be an amendment of little consequence. We do not regard it as being of little consequence. The Opposition suggests that the addition of the word wilfully' will indicate that there has to be a conscious knowing act which must be shown before a person can be found guilty, if that be the appropriate description of the state in which a person finds himself when he has offended against this clause, of monopolisation. Monopolisation is again a word so sweeping that one wonders whether it might not defeat its very purpose. If honourable senators look at where the Opposition wants to put the word 'wilfully' in subclause ( 1 ) they will get an indication of what the Opposition is concerned about. It reads:

(   I ) A corporation that is in a position substantially to control a market for goods or services shall not take advantage of the power in relation to that market that it has by virtue of being in that position-

(a)   to eliminate or substantially to damage a competitor in that market or in another market;

(b)   to prevent the entry of a person into that market or into another market; or

(c)   to deter or prevent a person from engaging in competitive behaviour in that market or in another market.

What is meant by the words: 'A corporation that is in a position substantially to control a market for goods or services'? We were told in the course of the explanation of the Bill in the second reading stage that an arithmetical test by which one looked at the size of the market and determined what proportion of the market a company controlled was not an adequate test because it was illusory. One sees difficulties in that test and I would not blink at them.

What is the position as a result of the words that are now to be relied upon? When is a company to know whether it substantially controls a market for goods or services? What is a market? Is it the market within the area in which the company is operating? Is it a market within the capital city, or the metropolitan environs? Is it a market which is State-wide or is it a market which is Australia-wide? We are not given assistance by the definition except to the extent that a market means a market in Australia. These are problems which will confront any company which may feel it is in a position substantially to control a market. Whilst it may be said that it is a good thing that a company in that position has to have regard to what, it does and that this legislation might help to make it have regard to what it does to ensure that it does not act against the public interest nevertheless the larger the control which a company has on a market the greater are the obligations it owes and the greater the dependence of other people upon that company being able to continue to provide the goods or services which it is in business to provide.

I instance the fact that the clause as it stands prohibits a corporation that is in a position to substantially control a market from engaging in conduct that is directed to eliminating or substantially damaging a competitor in that market. What is the position if a large company decides to cut prices? If a company feels that there is an area in which it can reduce its prices, its doing so may have the effect of prejudicing a competitor. That has the effect of eliminating that competitor from the market and that is something which the Government is trying to prohibit. If it does not eliminate the competitor from the market it substantially damages the competitor. Therefore, we could have the anomalous situation that what was a genuine price reduction by a company which was operating over a wide field could be regarded as a contravention of this provision. It could decide to expand its sales, to engage in a vast promotional campaign or to undertake immense advertising expenditure because it believed that this was the way in which it could promote its business. It knew that it could promote its business only by the benefit it gave to its customers by the sales it could make. It will increase sales only if it makes a greater impact on the market. This could have the effect of reducing the number of people in that market. It could have the effect of eliminating some people who were close to the line and who could not withstand the hotter competition.

I would be interested to hear the AttorneyGeneral's reactions to this point. On the face of it, it would have the effect of exposing the company which did these things to action by the Attorney-General, the Trade Practices Commission or any competitor who was eliminated. The only defence, I imagine, which such a company could raise would be: ' We were endeavouring to expand our business. We knew that we would increase our sales, but we did not know that we would eliminate a competitor. We took a different view, possibly, about the size of the market. We may have done it quite innocently'. Therefore, we believe that some provision ought to be inserted in this legislation which states that there must be a conscious action by the company which does these things before it can be exposed to the penalties which the Act provides.

In short, we say that before a corporation which is in this position can be said to have monopolised, it must be shown to have done so with an intent. It must be shown to have wilfully done so with a view to achieving one of the objectives which are set out in the legislation. Therefore, the word 'wilfully' is proposed to be inserted. We are not completely satisfied that the word is the best word which can be used to explain the purpose which we have in mind. If it appears to the Attorney-General that the point we are making is one which he is prepared to accommodate in any way, we would be interested to hear whether he has a form of words which would endeavour to meet the situation. We certainly feel that there could be a completely paradoxical situation under this legislation if a company which provides a greater service to the public is said to be acting contrary to the best interests of the public.







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