Sims sees Act problems as basis for ‘sad day for the economy’
The Australian Competition and Consumer Commission (ACCC) has acknowledged the loss of the Acacia Ridge case to Pacific National (PN) and pointed to legislative weaknesses for the outcome.
The Full Court of the Federal Court rejected the ACCC’s appeal in relation to proceedings brought to stop Pacific National’s acquisition of the Acacia Ridge Terminal in Brisbane by Aurizon.
The ACCC had appealed the 2019 judgment of the Federal Court which held that the acquisition would not be likely to substantially lessen competition due to an undertaking that Pacific National had offered the court.
In the end, the full court discounted the need even for the undertakings, despite them being accepted by the trial judge.
ATN has sought comment from PN on the fate of the offered undertakings and is awaiting a response.
Read how Pacific National greeted the case victory, here
“While the ACCC was successful in relation to a number of legal issues, the full court found there was insufficient evidence to establish that the acquisition was likely to result in a substantial lessening of competition, and dismissed the ACCC’s appeal,” the competition watchdog says.
Although the majority of the full court agreed with the ACCC’s position on the meaning of ‘likely’, the case hinged on the ACCC establishing the likelihood of another player seeking to enter the market in the next five to 10 years.
The full court considered that the prospect of new entry was no more than speculative.
“This was a particularly important case for Australia’s merger laws, and the outcome demonstrates the real difficulty of applying the substantial lessening of competition provisions in the legislation,” ACCC chair Rod Sims says.
“This is also a sad day for the economy, because the ACCC’s view is that the prospects of competition in rail freight have been significantly diminished and the impacts of this will be with us for more than a decade.”
The ACCC’s case was that PN’s ownership of the Acacia Ridge Terminal would allow it to effectively prevent access to new entrants, entrenching Pacific National’s position as the dominant rail freight carrier on the east coast.
“We will now carefully consider the full court’s judgment,” Sims says.
“The ACCC will continue to consider what changes are needed to make Australia’s merger laws work in the way they need to, to safeguard the economy from highly concentrated markets.”