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Wednesday, 14 August 1974
Page: 923

Senator MURPHY (New South WalesAttorneyGeneral) - The provision is not directed at size as such. It is confined to the conduct by which a monopolist uses the market power he derives from his size against the competitive position of competitors or would-be competitors- for example, by inducing a supplier or customer who is dependent upon him not to deal with a competitor, or by predatory prices. A monopolist is not prevented from competing as well as he is able- for example, by taking advantage of economies of scale, developing new products or otherwise making full use of such skills as he has or protecting his patent rights in respect of an invention. In doing these things he is not taking advantage of his market power. Therefore, the example which the Deputy Leader of the Opposition put is not really in point. He said that the monopolist, by dint of his skills, increases his sales and so forth. That is not a contravention of this clause.

Senator GREENWOOD -Why is it a contravention if he reduces the ability of someone to compete because that someone loses his share of the market?

Senator MURPHY - Because in that instance he is not taking advantage of the monopolistic power. He is just using ordinary skills, whether they are described as competitive skills or other skills. The situation is not covered by the clause. We oppose the amendment on the ground that it merely adds another element of proof. It is an element of proof which is quite unnecessary having regard to the elements already required to be proved; for example the need to show that the monopolist has taken advantage of his power to control the market- not merely that he has it but that he has taken advantage of it. The inclusion of this word 'wilfully' will create problems.

It will not be easy in this kind of legislation to deal with monopolists. Monopolists are, by their nature, well able to protect themselves, but if one contemplates a situation where in proceedings in court the word 'wilfully' is seized upon, notwithstanding that all the other elements of the case are established one can see that there will be immense problems in showing wilfulness and intent on the part of a corporation. In the United Kingdom there is dreadful trouble, even in criminal matters, when the courts have to determine what the word 'wilfully' means in terms of the conduct of a corporation. As one would expect, it is an entity in the law, an artificial construction of law, and if one has to prove some concept of wilfulness it will produce something which is quite unnecessary and quite unwarranted in the light of elements which already exist in this legislation. The provision has been carefully and thoughtfully drafted. It has been given a great deal of consideration and I would ask the Committee not to add words such as this which will be simply another peg by which corporations will endeavour to escape the consequences of action which ought not be carried on.

The Opposition is really saying that: notwithstanding that all the other elements are established, the monopolist- the corporation- that is in a position substantially to control a market for goods or services and take advantage of the power in relation to that market that it has by virtue of its position, to eliminate or substantially damage a competitor in that market or on the other hand to prevent the entry of a person into that market or another market or to deter or prevent a person from engaging in competitive behaviour, will be permitted to do any of these things unless it can be shown that what this monopolistic corporation did was in some way wilful. It can use its position, take advantage of it, damage the competitior or prevent the entry of persons into the market and the Opposition says: No troubles. It is entitled to do that.' Under the Opposition's approach a monopolist is perfectly entitled to take advantage of its power to do damage to and to prevent the entry of competitors into the market because it has not been shown that its action was wilful. The corporation has done it but we have not proved this extra element of wilfulness. I would suggest that some reflection on this matter should induce the Opposition not to persist with the philosphy that a monopolist is perfectly entitled to do any of the things I have mentioned so long as it was not wilful and would be perfectly entitled to take advantage of its monopolistic power to eliminate or substantially damage a competitor without infringing the law. If the Opposition's philosophy is that a monopolist ought to be able to do this with impunity unless one can show that it is wilful, the Government does not agree with it.

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