Case Study: Australian Competition Law and Air New Zealand's Practices

This case study examines the Air New Zealand v. Australian Competition and Consumer Commission (ACCC) case, focusing on allegations of collusive behavior concerning fuel surcharges. The trial judge initially dismissed the case, but the ACCC appealed. The core issue revolved around whether the conduct fell within the Australian market, with the court ultimately ruling in favor of Air New Zealand, as the actions occurred outside of Australia. The study analyzes the application of the Trade Practices Act (TPA), specifically section 45, and the interpretation of 'market' under the Act. It discusses the legal arguments, the impact of the decision on competition, and the potential long-term consequences of restrictive trade practices, particularly in relation to markets in Singapore and Hong Kong. The case underscores the importance of market definition and the implications of anti-competitive behavior. The analysis also considers the implications if the defendant had been an individual rather than a corporation.

Surname;1
Name
Instructor’s name
Course
Date
Air New Zealand Ltd v Australian Competition and Consumer Commission [2017] HCA 21
The company was accused of having fuel fixed according to certain surcharges. The trial
judge dismissed the case citing that there was no market in Australia. The Australian
Competition and Consumer Commission (ACCC) appealed against the trial judge's decision. The
appellant brought charges against the airlines claiming that they were involved in collusive
behavior; which involved fixing fees on airlines flying to Singapore and Hong Kong. The
airlines' claims were that the provisions of the Act did not apply because the market of the cargo
was in the nations of departure1.
The litigations were triggered by ACCC accusing the corporations involved, of being in
contravention of section 45 of the Trade Practices Act (TPA), which provides that; arrangements
should not be put in place to lessen competition or put restrictive trade practices in the market. It
was not disputed, whether the parties had entered into agreements that were in contravention of
section 45 (2) of TPA. The bone of contention was whether the conduct occurring was within the
Australian market. Section 4E of the Act describes a market as a market in Australia used
regarding goods and services. Section 3(5) of TPA, on the other hand, describes that competition
1 Chapman, Simon, and Becky Freeman. Removing the emperor's clothes: Australia and tobacco plain packaging.
Sydney University Press, 2013.

Surname;2
means competition in any market2. The trial judge, therefore, held that none of the markets were
relevant according to the Australian legislations. The appellant judge upheld the trial's judge
decision by majority.
The remedies that were being sought by ACCC were that the agreements which restricted
trade practices should be held in contravention of TPA and be fined as provided and also fined
for the surcharges accordingly. The outcome was that the ACCC failed to demonstrate that the
two Airline Companies involved were in collusive conduct in respect to fuel surcharges in
Singapore, despite the fact that they were engaged in the fixing of prices. The action was
dismissed because the conduct involved affected flights which operated outside Australia hence
Australian Market was not involved.
If ACCC had analyzed its market and stuck to the provision of TPA Act in bringing an
action to court, the case would have been avoided. If the Airlines were an individual instead of a
corporation, the facts and the case would have been dealt with in the same way. The sections of
the Act would have been construed in the same way, and anti-competitive laws apply whether in
a capacity as an individual or corporation. Therefore, nothing much would have changed. In this
case, the medium and long-term consequences are that restrictive trade practices will continue to
occur, as much as it’s outside Australia's territory. This might affect the competition by other
players in the market in Hong Kong and Singapore. The airlines may not have restrictive trade
practices affecting the Australian market, but the trade practices affect the other countries
2 Australian Competion Law, ACCC v Air New Zealand Limited;ACCC v PT Garuda Indonesia Limited, unpublished.

Surname;3
involved. If appropriate measures are not taken, completion will continue to be lessened,
negatively affecting the market, while only a few players benefit.
Bibliography
Articles/ Books/Report
Australian Competion Law, ACCC v Air New Zealand Limited;ACCC v PT Garuda Indonesia
Limited, unpublished.
Chapman, Simon, and Becky Freeman. Removing the emperor's clothes: Australia and tobacco
plain packaging. Sydney University Press, 2013.
Cases
Air New Zealand Ltd v Australian Competition and Consumer Commission [2017] HCA 21
Legislation
Australian Trade Practices Act (1975)