The Full Federal Court has dismissed the ACCC’s appeal in respect of its case against Pacific National and Aurizon. In dismissing the ACCC’s appeal, the Full Federal Court confirmed the test to be applied when assessing whether a firm’s conduct will be likely to have the effect of substantially lessening competition.
While this case centred around section 50 of the Competition and Consumer Act 2010 (CCA), which prohibits mergers or acquisitions having the effect or “likely” effect of substantially lessening competition in a market in Australia, the case is significant as it confirms the standard to be applied in relation to all of the competition provisions that contain a substantial lessening of competition or “SLC” test.
The Full Court confirmed that the word “likely” means “real commercial likelihood”. Hence, an acquisition will contravene section 50 of the CCA where there is a real commercial likelihood of it having the effect of substantially lessen competition in a market in Australia.
The Full Court also confirmed that the Court has power to accept an undertaking proffered by an acquiring party in lieu of the grant of an injunction in circumstances where the relevant acquisition would contravene section 50. Further, the Court may accept an undertaking as it considers appropriate in the circumstances of a case.
These issues arise out of Pacific National’s proposed acquisition of various intermodal assets from Aurizon in 2017. For more details, please see our briefing.
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