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COVID-19 and competition and consumer law issues; ACCC derailed in the dismissal of the Pacific National / Aurion appeal; and SOLD - Gumtree's acquisition of Cox Media gets the all clear.
Sharing is caring: private hospitals to assist states in their response to COVID-19
To assist with the COVID-19 response, state Departments of Health around Australia have recently sought ACCC authorisation to allow state governments to enter into partnership agreements with private healthcare providers. The partnership agreements enable state and territory governments to increase the capacity of their health systems during the pandemic by integrating the operations of public and private hospitals. The partnership agreements also assist private hospitals to remain funded and viable following the suspension of non-urgent surgery in connection with the pandemic. Interim authorisation was granted to Victoria and Queensland on 7 April, South Australia and the Northern Territory on 17 April, Western Australia on 29 April and New South Wales and Tasmania on 1 May.
Electricity and gas retailers to cooperate on relief package
On 1 May 2020, the ACCC granted interim authorisation to the Australian Energy Council (AEC) and participating electricity and gas retailers to engage in collective discussion, share information and enter into arrangements to provide minimum standards of financial and non-financial relief to customers facing financial difficulty as a result of the COVID-19 pandemic. Allens is acting for the AEC in relation to the authorisation application.
This interim authorisation follows an earlier one granted to the Australian Energy Market Operator (AEMO) and market participants on 3 April 2020, and expanded on 17 April 2020, which related to industry cooperation to ensure the ongoing security and stability of the energy market. Allens is acting for AEMO in relation to the authorisation application.
ACCC puts brakes on interim authorisation for car rental companies
On 8 May 2020, the ACCC revoked an interim authorisation previously granted to rental companies Avis, Budget, Hertz, Europcar and Thrifty. The interim authorisation was initially granted in February 2020 to allow the rental companies to jointly negotiate with Cairns Airport in relation to their lease agreements, such as parking bays and airport counters.
Due to COVID-19's significant impacts on the car rental sector, the rental companies have been unable to engage in the conduct permitted by the interim authorisation. The rental companies indicated they would voluntarily suspend engaging in the authorised conduct and the ACCC revoked the authorisation accordingly. The ACCC will delay its ultimate decision on the substantive authorisation.
The Full Federal Court has dismissed the ACCC's appeal against Aurizon's proposed sale of the Acacia Ridge rail terminal (Terminal) to Pacific National.
In May 2019, the trial judge accepted a behavioural undertaking from Pacific National to the effect that it would not engage in discriminatory conduct against competitors when providing access to the Terminal. The ACCC brought an appeal refuting the court's power to accept the undertaking and to take it into account as a relevant fact when determining whether the acquisition would likely lead to a substantial lessening of competition.
The Full Federal Court held that the court should not have regard to the undertakings offered by the merger parties when assessing whether the acquisition was likely to lead to a substantial lessening of competition. The Full Federal Court did, however, accept that the court can order compliance with an undertaking in lieu of granting injunctive relief, provided that a contravention of section 50 of the Competition and Consumer Act 2010 (Cth) (CCA) was found.
Pacific National and Aurizon also cross-appealed the finding by the trial judge that, in the absence of the undertaking, the acquisition was likely to substantially lessen competition. The Full Court found that the prospect of a new entrant into the market was speculative and concluded that the acquisition was unlikely to substantially lessen competition. The Full Court in turn released Pacific National from the undertaking.
Please see our more detailed analysis of this this decision here.
On 8 May 2020, the ACCC and the Office of the Australian Information Commissioner (OAIC) jointly released the Compliance and Enforcement Policy for the Consumer Data Right (CDR), which is a regime that aims to facilitate data portability for Australian consumers. See our in-depth analysis of the policy here.
The CDR is jointly administered and enforced by the ACCC and the OAIC. The Compliance and Enforcement Policy outlines the approach the ACCC and OAIC will take to encouraging compliance and preventing contraventions of the CDR. To monitor and assess compliance, the ACCC and the OAIC will have the ability to:
- receive stakeholder information;
- conduct audits and assessments;
- require business reporting; and
- issue information requests or compulsory notices.
The CDR regime is to be rolled out economy-wide, starting with the banking sector. However, non-major banks, building societies and credit unions have been granted a temporary three month exemption (outlined in our last edition of InTouch).
On 30 April 2020, the ACCC announced it had authorised Gumtree's acquisition of Cox Media, which operates the online platforms Carsguide and Autotrader. The acquisition will allow Gumtree to combine its online automotive advertising with Cox Media's platforms. Although the acquisition would remove one of the five major competitors in a relatively concentrated market, the ACCC found that the merged entity would continue to be constrained by both Carsales - which is the clear market leader in terms of audience, listings and revenue - and Facebook Marketplace, which is a growing competitor.
This authorisation is significant as it is the second merger to be authorised under the merger authorisation process which came into effect in 2017.
The ACCC has published new Prohibited Conduct in the Energy Market Guidelines (the Guidelines) to assist electricity retailers and generators in complying with new laws aimed at protecting consumers and businesses from excessive electricity prices.
The Guidelines provide clarity about new prohibitions under Part XICA of the CCA, which relate to retail pricing, financial contract liquidity and electricity spot markets. The Guidelines seek to assist industry in complying with the new prohibitions by outlining:
- the ACCC's general approach when investigating alleged contraventions of the prohibitions;
- examples of conduct that will be likely (and unlikely) to contravene the prohibitions; and
- two new remedies, which empower the Treasurer to make a contracting order, and the Federal Court to make a divestiture order.