ACCC has success with new market power provision


TasPorts agrees in Federal Court on lessening competition finding

ACCC has success with new market power provision
Port Latta. Pic: Grange

 

The Australian Competition and Consumer Commission (ACCC) has chalked up a win in the ports sector with its amended misuse of market power provision.

The ACCC alleges that state-owned Tasmanian Ports Corporation (TasPorts), which owns all but one port in northern Tasmania, sought to stop a new entrant, Engage Marine Tasmania, from competing effectively with TasPorts’ marine pilotage and towage businesses, "with the purpose, effect and likely effect of substantially lessening competition".

The competition watchdog reports that the Federal Court has "declared by consent" that this is the case regarding Engange customer Grange Resources at Port Latta.

"This is an important decision because port services play a pivotal role for the Tasmanian economy, and this is the first time a corporation has been declared to have breached the revised misuse of market power law," ACCC chair Rod Sims says.

TasPorts has also provided the ACCC with a court-enforceable undertaking, requiring it to ensure that Engage Marine has access to berth space for tug boats at Inspection Head in northern Tasmania on reasonable commercial terms, and that charges imposed by TasPorts on Grange for regulatory functions at Port Latta are reasonable.

"Importantly, the undertaking also provides that TasPorts will spend at least $1 million on the wharf infrastructure at Inspection Head," the ACCC says.

The ACCC agreed not to press for a penalty order.

The win reverses a run of setbacks for the competition watchdog in and out of court in the ports sphere, particularly on Port of Newcastle fees and stevedore container access charges.


Read how the ACCC’s case against TasPorts first emerged, here


"Accepting this consent outcome ensures towage customers in northern Tasmania will receive the benefits from competition quickly," Sims says.

"This competition should make a real difference at Tasmanian ports, ultimately to the benefit of consumers.

"Businesses with substantial market power have a special responsibility when deciding how to respond to competitive threats. If they respond in a competitive way, for example by offering customers better products at better prices, they will not face the risk of enforcement action.

"However, when they hinder a competitor from competing on its merits, the ACCC will not hesitate to take enforcement action."

The court ordered TasPorts to pay a contribution to the ACCC’s costs.

The Tasmanian government-owned enterprise undertakes to ensure for five years that:

  • Tonnage charges imposed by TasPorts on Grange, or any other person on account of or in connection with TasPorts’ regulatory functions at Port Latta, are reasonable and cannot be varied to discriminate against the use of towage suppliers other than TasPorts at the port
  • Engage Marine has access to berth space at Inspection Head for two tug boats on reasonable commercial terms
  • It will invest, during the term of the undertaking, a minimum of $1 million on the wharf or other facilities at Inspection Head to mitigate the risk that deterioration of the wharf or those facilities disrupts or prevents the berthing of tugs or other commercial vessels at Inspection Head
  • It will take all steps required to enable port users to use TasPorts’ port communications system to book a towage service provided by Engage Marine at the ports of Burnie, Bell Bay and Devonport in northern Tasmania.

 

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