The Department of Anaesthesia at St Vincent’s Private Hospital Sydney has provided section 87B undertakings to the ACCC to address the ACCC’s concerns over alleged anti-competitive arrangements between the department’s anaesthetists.
Since the early 1990s, the private anaesthetists have arranged to allocate all of the hospital’s permanent anaesthetic work amongst themselves, thereby excluding the ability for external anaesthetists to provide services. The ACCC indicated that it considered it likely that the arrangement contravened section 45 of the Trade Practices Act, which prohibits anti-competitive arrangements containing exclusionary provisions. Accordingly, the department has by way of section 87B undertakings agreed to discontinue this arrangement and have all permanent anaesthetic work allocated by the hospital using a system where surgeons and other proceduralists can request the allocation of their preferred anaesthetist. The hospital has also undertaken to implement trade practices law compliance training for its member anaesthetists.
This is a further example of the importance of compliance by professionals with the provisions of the Trade Practices Act, as outlined in our article 'Safe trading for professionals' in our May edition.
The ACCC has issued a determination granting conditional authorisation for three years for an alliance between Virgin Blue and Air New Zealand in relation to all aspects of their passenger services between Australia and New Zealand after previously issuing a draft determination proposing to deny the application. The ACCC considered that the alliance was likely to result in material public benefits, including the potential for lower fares and promotion of competition in the business traveller segment of the Trans-Tasman market. In granting the authorisation, the ACCC also decided to impose conditions to address concerns on the effect of the authorisation on certain routes. The conditions require the applicants to “maintain, and grow, a base level of capacity on the routes of concern”.
In addition, the ACCC has issued a draft decision authorising the proposed Virgin Blue-Etihad alliance. Under the alliance, Virgin Blue and Etihad have agreed to cooperate on joint pricing and scheduling of services between Australia and Abu Dhabi. This is consistent with the ACCC’s decision to grant an interim authorisation to the alliance in September this year.
This current round of authorisations follows the ACCC’s decision last year to grant authorisation for a joint venture between Virgin Blue and Delta Air Lines.
BHP and Rio Tinto have terminated their iron ore production joint venture (which covered all West Australian iron ore assets of both companies) after signals from various regulators that approval of the deal was unlikely to occur, in the absence of significant changes to the proposal.
The ACCC, European Commission, Japan Fair Trade Commission, Korea Fair Trade Commission and German Federal Cartel Office all indicated that they would not approve the joint venture in its current form because of concerns that it would reduce competition, result in a restriction of supply and potentially lead to higher prices. In the ACCC’s Statement of Issues released in March this year, the ACCC noted that, despite approving BHP’s proposed acquisition of Rio Tinto in 2008, the global financial crisis had altered conditions in the iron ore industry, resulting in competition concerns arising in respect of the new joint venture proposal. Specifically, the ACCC highlighted the joint venture’s ability and incentive to profitably withhold supply in the future.
The Federal Court of Australia has found Optus’ promotion of its ‘Think Bigger’ broadband plans to be misleading and deceptive. The ACCC alleged, amongst other things, that the advertisements failed to sufficiently inform consumers that the speed for both peak and off-peak usage would be limited once the peak usage was reached. In reaching his decision, Justice Perram rejected Optus’ contention that its promotions could not be seen as misleading in light of the amount of time spent by consumers in researching broadband purchases. In granting the injunctive relief sought by the ACCC, the Federal Court has restrained Optus from engaging in similar conduct for the next three years.
The ACCC has announced that it will not oppose Singapore Exchange Ltd's (SGX) proposed $8.4 billion acquisition of ASX Ltd (ASX) on the basis that the acquisition would not have the likely effect of substantially lessening competition in any market in Australia.
The ACCC indicated that SGX and ASX competed to a limited extent for listing services, but not for trading, clearing or settlement services. The ACCC also concluded that the acquisition would not deter potential entrants such as Chi-East (a SGX and Chi-X Global joint venture) or Chi-X Global itself from establishing certain trading services in competition in Australia.
The ACCC's market inquiries revealed concerns about access to ASX's market data and clearing and settlement facilities; but the ACCC concluded that such concerns were not caused by the proposed acquisition itself.
The acquisition still requires approval by the Federal Treasurer and the Foreign Investment Review Board, as well as approval by Parliament for the lifting of the current 15% cap on shareholdings in the ASX. The Greens indicated that they will not support such a move unless "benefits can be clearly proven".
On 9 December 2010, the ACCC announced that it would not oppose a number of potential acquisitions by both Origin Energy Limited (Origin) and AGL Energy Limited (AGL) as part of the NSW Energy Privatisation process.
Assets up for sale in the privatisation process included the three State-owned energy retailers (Energy Australia, Integral Energy and Country Energy), 7 power station development sites and 4 “gentrader bundles” which provide bidders with the electricity trading rights to the nine State-owned generators.
In its decision, the ACCC stated it would not block Origin’s acquisition of:
Country Energy and Integral Energy; or
Country Energy and Integral Energy with one of the Eraring, Delta Coastal or Delta Western gentrader bundles and one or more of the generator development sites.
The ACCC also cleared the possible acquisition by AGL of Country Energy or Integral Energy together with one of the Eraring, Delta Coastal or Delta Western gentrader bundles and one or more of the generator development sites
Subsequent to the ACCC’s decision, on 14 December 2010. the NSW Treasurer announced that agreement had been reached with Origin for the acquisition of Country Energy, Integral Energy and the Eraring gentrader bundle for $3.25 billion and that TRUenergy had agreed to acquire Energy Australia, the Delta Western gentrader bundle and 3 generator development sites for $2.035 billion.
The ACCC has granted authorisation to a number of coal producers to collectively bargain terms and conditions of below rail access with QR Network in relation to the transportation of coal to the Wiggins Island Coal Export Terminal at the Port of Gladstone which is in the process of development.
The ACCC considered various factors before concluding that the public benefits of the authorisation would outweigh any potential public detriment. The benefits recognised by the ACCC included significant transaction cost savings, greater commercial certainty regarding investment at the port and less delays in additional export revenue being derived. Given the voluntary nature of the arrangements, the limited composition of the collective bargaining group and the fact that negotiations and exchanges would be confined to below rail infrastructure, the ACCC concluded that any potential detriment would be limited.
The authorisation has been granted for a period of 15 years and is conditional on the coal producers providing written notice to the ACCC of any change in ownership of the rail transport infrastructure during the term of the authorisation.