Hay, George A; Smith, Rhonda L --- "Why Can't a Woman Be More Like a Man?' - American and Australian Approaches to Exclusionary Conduct" [2007] MelbULawRw 41; (2007) 31(3) Melbourne University Law Review 1099

^[∗] Song title from My Fair Lady (Directed by George Cukor, Warner Bros‑First National Pictures, 1964).

^[†] BS (Le Moyne), MA, PhD (Northwestern); Edward Cornell Professor of Law and Professor of Economics, Cornell Law School, Cornell University. The author is grateful to Erik Schmid for assistance in the preparation of this article.

^[‡] BCom, MA, DCom (Melb); Senior Lecturer, Department of Economics, Faculty of Economics and Commerce, The University of Melbourne.

^[1] Sherman Act, c 647, 26 Stat 209 (1890). For the current version: see 15 USC §§ 1–7 (2000 & Supp IV, 2004).

^[2] See, eg, Verizon Communications Inc v Law Offices of Curtis V Trinko, LLP[2004] USSC 4; , 540 US 398 (2004) (‘Trinko’); Weyerhaeuser Co v Ross‑Simmons Hardwood Lumber Co, Inc, 127 S Ct 1069 (2007); United States v Microsoft Corporation[2001] USCADC 115; , 253 F 3d 34, 70 (Edwards CJ, Williams, Ginsburg, Sentelle, Randolph, Rogers and Tatel JJ) (DC Cir, 2001) (‘Microsoft’); LePage’s Inc v 3M (Minnesota Mining & Manufacturing Co)[2003] USCA3 75; , 324 F 3d 141 (3^rd Cir, 2003); United States v AMR Corporation[2003] USCA10 161; , 335 F 3d 1109 (10^th Cir, 2003); United States v Dentsply International, Inc[2005] USCA3 37; , 399 F 3d 181 (3^rd Cir, 2005).

^[3] See below Part IV(B). The Birdsville Amendment to s 46 of the TPA — purportedly formulated by Senator Barnaby Joyce at a pub in Birdsville — is a new provision dealing with predatory pricing: see TPA ss 46(1AA)–(1AB). The Trade Practices Amendment Act [No 1] 2007 (Cth) sch 2 pt 1 also introduced a number of important amendments relevant to the meaning and assessment of market power: see TPA ss 46(3A)–(3D), (4A).

^[4] See generally George A Hay, ‘The Quiet Revolution in US Antitrust Law’ [2007] UQLawJl 2; (2007) 26 University of Queensland Law Journal 27.

^[5] See below n 91 and accompanying text.

^[6] [1956] USSC 87; 351 US 377 (1956).

^[7] Ibid 391 (Reed J for the Court) (citations omitted).

^[8] George A Hay, ‘Market Power in Antitrust’ (1992) 60 Antitrust Law Journal 807, 820.

^[9] Cellophane Case[1956] USSC 87; , 351 US 377, 403 (Reed J for the Court) (1956).

^[10] Ibid 391 (Reed J for the Court) (1956).

^[11] In fact, just a few sentences after the oft‑quoted phrase, the US Supreme Court makes this clear when it says that ‘[p]rice and competition are so intimately entwined that any discussion of theory must treat them as one. It is inconceivable that price could be controlled without power over competition or vice versa’: Cellophane Case[1956] USSC 87; , 351 US 377, 392 (Reed J for the Court) (1956).

^[12] Ibid 403 (Reed J for the Court) (1956).

^[13] Department of Justice and Federal Trade Commission, United States, Horizontal Merger Guidelines (1997) 2 (citations omitted).

^[14] Ibid.

^[15] See, eg, Hay, ‘Market Power in Antitrust’, above n 8, 817–19; Thomas G Krattenmaker, Robert H Lande and Steven C Salop, ‘Monopoly Power and Market Power in Antitrust Law’ (1987) 76 Georgetown Law Journal 241, 246–7. For a slightly different approach: see Dennis W Carlton and Jeffrey M Perloff, Modern Industrial Organization (4^th ed, 2005) 93.

^[16] William M Landes and Richard A Posner, ‘Market Power in Antitrust Cases’ (1981) 94 Harvard Law Review 937, 937. In tying cases, vertical non‑price restraint cases and certain boycott cases brought under § 1 of the Sherman Act, courts have indicated that a finding of market power may be an essential first step in finding a violation: see, eg, Jefferson Parish Hospital District No 2 v Hyde[1984] USSC 64; , 466 US 2 (1984) (tying case); Morrison v Murray Biscuit Co, 797 F 2d 1430 (7^th Cir, 1986) (vertical non‑price restraint case); Northwest Wholesale Stationers, Inc v Pacific Stationary & Printing Co[1985] USSC 154; , 472 US 284 (1985) (boycott case); see also Hay, ‘Market Power in Antitrust’, above n 8, 807–8.

^[17] Thirty per cent is often cited although this is merely an arbitrary court‑determined threshold: see, eg, Section of Antitrust Law, American Bar Association, Intellectual Property and Antitrust Handbook (2007) 190; Brokerage Concepts, Inc v US Healthcare, Inc, 140 F 3d 494, 517 (Becker CJ for Becker CJ, Mansmann and Rosenn JJ) (3^rd Cir, 1998) (‘since Jefferson Parish no court has inferred substantial market power from a market share below 30 percent’). For an economist, market power is a question of degree and ceteris paribus, the higher the market share, the greater the degree of market power.

^[18] The minimum market share needed to create a presumption of monopoly power is an arbitrary court‑imposed threshold: see generally Hay, ‘Market Power in Antitrust’, above n 8, 825–7. Most courts that have mentioned a specific market share have used a figure in the 50–70 per cent range: see Image Technical Services, Inc, v Eastman Kodak Co[1997] USCA9 2479; , 125 F 3d 1195, 1206 (Beezer CJ for Beezer CJ and Thompson J) (9^th Cir, 1997) (65 per cent); Domed Stadium Hotel, Inc v Holiday Inns, Inc[1984] USCA5 704; , 732 F 2d 480, 489 (Jolly J for Politz, Randall and Jolly JJ) (5^th Cir, 1984) (50 per cent); Exxon Corporation v Berwick Bay Real Estate Partners[1984] USCA5 1567; , 748 F 2d 937, 940 (Williams, Jolly and Hill JJ) (5^th Cir, 1984) (70 per cent). Others have indicated even higher shares: see Colorado Interstate Gas Co v Natural Gas Pipeline Co of America, 885 F 2d 683, 694 fn 18 (Moore J for Moore, Anderson and Baldock JJ) (10^th Cir, 1989) (70–80 per cent). Of course, other factors, especially high barriers to entry, must also be present: see George A Hay, ‘Boral — Free at Last’ (2003) 10 Competition & Consumer Law Journal 323, 329.

^[19] Trinko[2004] USSC 4; , 540 US 398, 407 (Scalia J for Rehnquist CJ, O’Connor, Kennedy, Ginsburg and Breyer JJ) (2004), citing United States v Grinnell Corporation[1966] USSC 122; , 384 US 563, 570–1 (Douglas J for the Court) (1966).

^[20] See above n 13 and accompanying text.

^[21] 148 F 2d 416, 429–30 (Learned Hand J) (2^nd Cir, 1945).

^[22] [2004] USSC 4; 540 US 398, 407 (Scalia J) (2004). For a discussion of the case: see below Part III(B).

^[23] Brown Shoe Co v United States[1962] USSC 112; , 370 US 294, 320 (Warren CJ for the Court) (1962) (emphasis in original).

^[24] Occasionally it is said that the antitrust laws should prohibit only those tactics that would exclude an ‘equally efficient’ competitor. For example, in discussing how courts should treat bundled discounts, the recent report of the Antitrust Modernization Commission argued for standards that would find a defendant engaging in bundled discounting liable only if that discounting would exclude an equally efficient competitor: see Antitrust Modernization Commission, United States, Report and Recommendations (2007) 100. Whatever the wisdom of this description as a broad guiding principle, it does not readily yield easily applied rules of thumb in many circumstances.

^[25] That is, the intense price‑cutting leads eventually to a monopoly and the monopoly endures long enough that the consumer harm from the period of monopoly pricing outweighs the short‑term benefit from the period of low prices.

^[26] One might also contemplate the possibility of an approach that would permit firms, when engaging in lowering prices or improving products, to gain market share at the expense of smaller rivals as long as that did not drive them out of the market completely, but one quickly realises that such an approach would pose immense practical difficulties. Should all actual and prospective rivals be preserved or just certain ones: those, for example, who are reasonably efficient? How is a dominant firm to know whether its conduct will merely take away market share from smaller rivals or actually push one or more into bankruptcy? One of the consequences of such an attempt to finetune the law dealing with exclusionary conduct will be discussed further below in terms of the risk of so‑called ‘Type I error’: see below n 31 and accompanying text. However, one can appreciate more generally why such finetuning would create great difficulties.

^[27] [1993] USSC 105; 509 US 209 (1993).

^[28] Ibid 222–3 (Kennedy J for Rehnquist CJ, O’Connor, Scalia, Souter and Thomas JJ).

^[29] Ibid 224 (Kennedy J for Rehnquist CJ, O’Connor, Scalia, Souter and Thomas JJ).

^[30] Ibid 226 (Kennedy J for Rehnquist CJ, O’Connor, Scalia, Souter and Thomas JJ).

^[31] A Type I error, also known as a false positive, would be finding a defendant liable for predation when there was no real risk of successful monopolisation or harm to competition. More generally, a Type I error arises when a hypothesis that should be accepted and is actually true, is rejected or nullified: see, eg, Michael O Finkelstein and Bruce Levin, Statistics for Lawyers (2^nd ed, 2001) 120–2; Michael O Finkelstein, Quantitative Methods in Law: Studies in the Application of Mathematical Probability and Statistics to Legal Problems (1978) 42–3; Joseph L Gastwirth, Statistical Reasoning in Law and Public Policy (1988) vol 1, 139–40. In the example given above, the absence of risk of successful monopolisation or harm to competition constitutes the hypothesis that is in fact true. The finding of liability falsely rejects this hypothesis and a concomitant Type I error emerges.

^[32] Brooke Group[1993] USSC 105; , 509 US 209, 223–4, 226–7 (Kennedy J for Rehnquist CJ, O’Connor, Scalia, Souter and Thomas JJ) (1993).

^[33] Ibid 223 (Kennedy J for Rehnquist CJ, O’Connor, Scalia, Souter and Thomas JJ) (citations omitted).

^[34] See, eg, United States v AMR Corporation[2003] USCA10 161; , 335 F 3d 1109 (10^th Cir, 2003).

^[35] 127 S Ct 1069 (2007).

^[36] For a discussion of the economics of predatory buying and the decision in Weyerhaeuser, 127 S Ct 1069 (2007): see George A Hay, Rhonda L Smith and Alexandra Merrett, ‘Predatory Buying: The Weyerhaeuser Decision and Its Implications for Australia’ (2007) 15 Competition & Consumer Law Journal 199. That and other recent decisions from the US Supreme Court are discussed in more detail in Hay, ‘The Quiet Revolution in US Antitrust Law’, above n 4.

^[37] It can also be characterised in such a way as to reverse the causation: a buyer offers to pay more than it needs to in order to acquire the amount of inputs it requires for short run profit maximisation, and suppliers will therefore seek to sell more than they would at lower prices. It doesn’t really matter which way the causation is expressed, since the higher prices paid and the greater quantities purchased are two sides of the same predatory coin.

^[38] Weyerhaeuser, 127 S Ct 1069, 1078 (Thomas J for the Court) (2007).

^[39] Ibid 1076–7 (Thomas J for the Court).

^[40] Ibid 1075, 1077 (Thomas J for the Court).

^[41] Ibid 1078 (Thomas J for the Court).

^[42] Brooke Group[1993] USSC 105; , 509 US 209, 226 (Kennedy J for Rehnquist CJ, O’Connor, Scalia, Souter and Thomas JJ) (1993).

^[43] Weyerhaeuser, 127 S Ct 1069, 1077 (Thomas J for the Court) (2007).

^[44] [2003] HCA 10; (2003) 215 CLR 374.

^[45] See below Part IV(B).

^[46] [1973] USSC 65; 410 US 366 (1973).

^[47] Ibid 370–2 (Douglas J for the Court).

^[48] Ibid 377–8 (Douglas J for the Court).

^[49] The ‘essential facility’ doctrine refers to the notion that, under certain conditions, a firm or group of firms that controls an ‘essential facility’ (that is, some infrastructure that is critical to a firm’s being able to compete in some market), must make that infrastructure available to potential competitors in that market: see Robert Pitofsky, Donna Patterson and Jonathan Hooks, ‘The Essential Facilities Doctrine under US Antitrust Law’ (2002) 70 Antitrust Law Journal 443. In short, ‘a firm that controls an essential facility [must] make that facility available to competitors on reasonable, nondiscriminatory terms’: Section of Antitrust Law, American Bar Association, Energy Antitrust Handbook: A Guide to the Electric and Gas Industries (2002) 176 (citations omitted). For a more sceptical view of the validity or coherence of the doctrine: see Phillip Areeda, ‘Essential Facilities: An Epithet in Need of Limiting Principles’ (1990) 58 Antitrust Law Journal 841.

^[50] [1985] USSC 162; 472 US 585 (1985).

^[51] Ibid 587–90 (Stevens J for the Court). Whether the geographic market could be limited to the town of Aspen is a serious question, but one the US Supreme Court did not need to address for the purposes of the appeal.

^[52] Ibid 589–90 (Stevens J for the Court).

^[53] Ibid 590–2 (Stevens J for the Court).

^[54] Ibid 592–3 (Stevens J for the Court).

^[55] See, eg, ibid 593–4 (Stevens J for the Court).

^[56] Ibid 595 (Stevens J for the Court).

^[57] Ibid 608, 610–11 (Stevens J for the Court).

^[58] Ibid 605–11 (Stevens J for the Court).

^[59] Pitofsky, Patterson and Hooks, above n 49, 448 fn 50.

^[60] [1973] USSC 65; 410 US 366 (1973).

^[61] [1985] USSC 162; 472 US 585 (1985).

^[62] See, eg, Alaska Airlines, Inc v United Airlines, Inc, 948 F 2d 536, 542 (Hall J for Norris, Hall and Trott JJ) (emphasis added) (9^th Cir, 1991): ‘the essential facilities doctrine imposes liability when one firm, which controls an essential facility, denies a second firm reasonable access to a product or service that the second firm must obtain in order to compete with the first’; Byars v Bluff City News Co, Inc, 609 F 2d 843, 856 (Keith J for Keith, Merritt and Green JJ) (emphasis added) (6^th Cir, 1979): ‘a business or group of businesses which controls a scarce facility has an obligation to give competitors reasonable access to it’; Hecht v Pro‑Football, Inc, 570 F 2d 982, 992 (Wilkey J for McGowan, Winter and Wilkey JJ) (citations omitted) (emphasis added) (DC Cir, 1977): ‘where facilities cannot practicably be duplicated by would‑be competitors, those in possession of them must allow them to be shared on fair terms.’

^[63] [2004] USSC 4; 540 US 398 (2004).

^[64] Ibid 401 (Scalia J for Rehnquist CJ, O’Connor, Kennedy, Ginsburg and Breyer JJ).

^[65] Under Telecommunications Act of 1996, Pub L No 104‑104, 110 Stat 56 (codified in scattered sections of 47 USC).

^[66] Trinko [2004] USSC 4; 540 US 398, 404 (Scalia J for Rehnquist CJ, O’Connor, Kennedy, Ginsburg and Breyer JJ) (2004).

^[67] This would be somewhat similar to pts IIIA or XIB of the TPA except that there was an industry‑specific regulatory agency — the Federal Communications Commission — charged with enforcing the statute — the Telecommunications Act of 1996, Pub L 104‑104, 110 Stat 56 (codified in scattered sections of 47 USC) — and ensuring access on reasonable terms.

^[68] Trinko[2004] USSC 4; , 540 US 398, 405–7 (Scalia J for Rehnquist CJ, O’Connor, Kennedy, Ginsburg and Breyer JJ) (2004).

^[69] Ibid 407–16 (Scalia J for Rehnquist CJ, O’Connor, Kennedy, Ginsburg and Breyer JJ).

^[70] Three justices — Stevens J joined by Souter and Thomas JJ — concurred in the result but would have resolved the matter simply on grounds that the plaintiff lacked standing: ibid 416.

^[71] Ibid 407–8 (Scalia J for Rehnquist CJ, O’Connor, Kennedy, Ginsburg and Breyer JJ).

^[72] [1985] USSC 162; 472 US 585 (1985).

^[73] Trinko[2004] USSC 4; , 540 US 398, 409 (Scalia J for Rehnquist CJ, O’Connor, Kennedy, Ginsburg and Breyer JJ) (2004).

^[74] Ibid 411 (Scalia J for Rehnquist CJ, O’Connor, Kennedy, Ginsburg and Breyer JJ), citing Aspen Skiing[1985] USSC 162; , 472 US 585, 611 (Stevens J for the Court) (1985).

^[75] See, eg, Trinko[2004] USSC 4; , 540 US 398, 409–10 (Scalia J for Rehnquist CJ, O’Connor, Kennedy, Ginsburg and Breyer JJ) (2004).

^[76] See above n 32 and accompanying text.

^[77] Trinko[2004] USSC 4; , 540 US 398, 414 (Scalia J for Rehnquist CJ, O’Connor, Kennedy, Ginsburg and Breyer JJ) (2004), quoting Matsushita Electric Industrial Co Ltd v Zenith Radio Corporation[1986] USSC 58; , 475 US 574, 594 (Powell J for Burger CJ, Marshall, Rehnquist and O’Connor JJ) (1986).

^[78] See George A Hay, ‘Trinko: Going All the Way’ (2005) 50 Antitrust Bulletin 527.

^[79] Since Trinko[2004] USSC 4; , 540 US 398 (2004), plaintiffs have had some success in lower courts: see Edward D Cavanagh, ‘Trinko: A Kinder, Gentler Approach to Dominant Firms under the Antitrust Laws?’ (2007) 59 Maine Law Review 111. Apparently, incumbents have not yet figured out that a blanket refusal is a lot more risky than simply picking a price that renders it a matter of indifference whether the applicant gains access or not.

^[80] See above n 70.

^[81] See, eg, US Healthcare, Inc v Healthsource, Inc, 986 F 2d 589 (1^st Cir, 1993) where the Court found that the foreclosure of rivals was not demonstrated because, among other things, the clause was terminable on 30 days’ notice; Omega Environmental, Inc v Gilbarco, Inc[1997] USCA9 3334; , 127 F 3d 1157 (9^th Cir, 1997), cert denied 525 US 812 (1998), where the Court found that there was no violation in part because the defendants’ contracts were short‑term. However, if it is the market power of the dominant firm that effectively coerces the dealer or purchaser to accept the arrangement, it does not matter much to the competitive analysis whether it is a single long‑term — say, five years — contract or a series of shorter contracts, since the outcome will be the same.

^[82] See, eg, Microsoft[2001] USCADC 115; , 253 F 3d 34, 70 (Edwards CJ, Williams, Ginsburg, Sentelle, Randolph, Rogers and Tatel JJ) (DC Cir, 2001).

^[83] Ibid.

^[84] See, eg, Image Technical Services, Inc v Eastman Kodak Co[1997] USCA9 2479; , 125 F 3d 1195 (9^th Cir, 1997); Re Independent Service Organizations Antitrust Litigation v Xerox Corporation[2000] USCAFED 54; , 203 F 3d 1322 (Fed Cir, 2000).

^[85] Microsoft[2001] USCADC 115; , 253 F 3d 34, 85 (Edwards CJ, Williams, Ginsburg, Sentelle, Randolph, Rogers and Tatel JJ) (DC Cir, 2001).

^[86] These standards are discussed in: ibid. However, the Court’s judgment was ‘confined to the [specific] tying arrangement before [them] …, where the tying product [wa]s software whose major purpose [wa]s to serve as a platform for third‑party applications and the tied product [wa]s complementary software functionality’ and the judgment did not have ‘broader force’ to apply to ‘facts outside the record’: at 95 (Edwards CJ, Williams, Ginsburg, Sentelle, Randolph, Rogers and Tatel JJ). Therefore, the judgment stands for the narrow proposition that the per se rule was inappropriate for the specific facts as found in Microsoft[2001] USCADC 115; , 253 F 3d 34 (DC Cir, 2001), and cannot be interpreted as suggesting the abandonment of the per se rule for high technology products generally.

^[87] The most notorious example is the recent case of LePage’s Inc v 3M (Minnesota Mining & Manufacturing Co)[2003] USCA3 75; , 324 F 3d 141 (3^rd Cir, 2003), in which the US Court of Appeals for the Third Circuit, by a 7:3 majority, declined to use any of the traditional pigeonholes, concluding basically that LePage’s Incorporated and LePage’s Management Company, Limited Liability Company, even if they were reasonably efficient as producers of the product they sold, could not realistically compete against the ‘bundled rebate’ pricing scheme used by the Minnesota Mining and Manufacturing Company: at 152–64 (Sloviter J for Becker CJ, Nygaard, McKee, Ambro, Fuentes and Smith JJ). The recent report of the Antitrust Modernization Commission has recommended an approach that most closely resembles a Brooke Group[1993] USSC 105; , 509 US 209, 223 (Kennedy J for Rehnquist CJ, O’Connor, Scalia, Souter and Thomas JJ) (1993) predation standard after allocating some or all of the overall discount to the competitive product: see Antitrust Modernization Commission, above n 24, 99.

^[88] Natwest Australia Bank Ltd v Boral Gerrard Strapping Systems Pty Ltd [1992] FCA 511; (1992) 111 ALR 631, 637.

^[89] Plaintiffs’ chances of success in such sham litigation cases were reduced substantially as a result of the US Supreme Court’s decision in Professional Real Estate Investors, Inc v Columbia Pictures Industries, Inc[1993] USSC 51; , 508 US 49 (1993), in which the Court ruled that the plaintiff, in addition to showing that the defendant had the subjective intent to injure the plaintiff through the litigation process, must also prove that the litigation was ‘objectively baseless’: at 59 (Thomas J for Rehnquist CJ, White, Blackmun, Scalia, Kennedy and Souter JJ). Such a standard is a very generous one from the perspective of the defendant and equates approximately with no ‘probable cause’: at 60 (Thomas J for Rehnquist CJ, White, Blackmun, Scalia, Kennedy and Souter JJ).

^[90] Sherman Act, 15 USC § 2 (2000 & Supp IV, 2004).

^[91] Spectrum Sports, Inc v McQuillan[1993] USSC 13; , 506 US 447, 456 (White J for the Court) (1993). See also Times‑Picayune Pub Co v United States[1953] USSC 63; , 345 US 594, 626 (Clark J for the Court) (1953); Lorain Journal Co v United States[1951] USSC 100; , 342 US 143, 153–5 (Burton J for the Court) (1951).

^[92] Sherman Act, 15 USC § 2 (2000 & Supp IV, 2004).

^[93] TPA s 46.

^[94] One example worth mentioning, in part because it produced the largest damage award ever achieved in an antitrust case — a jury award of US$350 million trebled by operation of § 4 of the Clayton Act to US$1.05 billion — is Conwood Co, LP v United States Tobacco Co[2002] USCA6 235; , 290 F 3d 768, 780, 795 (Clay J for Edgar CJ and Gilman J) (6^th Cir, 2002). One of the claims was that the defendant’s sales representatives, in their role as category managers advising retailers which products should be on racks and how they should be grouped or categorised, removed the plaintiff’s display racks and advertising from retail stores without the retailers’ consent: at 778–80 (Clay J for Edgar CJ and Gilman J). The case is not a perfect example, however, because the very fact that the defendant was able to act as the category manager was based, at least in part, on its dominant market position: see, eg, at 776 (Clay J for Edgar CJ and Gilman J).

^[95] TPA s 46(1)(a).

^[96] TPA s 46(1)(b).

^[97] TPA s 46(1)(c).

^[98] Boral [2003] HCA 10; (2003) 215 CLR 374, 419 (Gleeson CJ and Callinan J), 459 (McHugh J).

^[99] [1989] HCA 6; (1989) 167 CLR 177.

^[100] Ibid 183–4 (Mason CJ and Wilson J).

^[101] Ibid 184–5 (Mason CJ and Wilson J).

^[102] Ibid 184 (Mason CJ and Wilson J).

^[103] Ibid 185 (Mason CJ and Wilson J).

^[104] TPA s 46.

^[105] Queensland Wire [1989] HCA 6; (1989) 167 CLR 177, 190–1 (Mason CJ and Wilson J), 193–4 (Deane J), 202 (Dawson J), 212–14 (Toohey J).

^[106] Ibid 192 (Mason CJ and Wilson J), 197–8 (Deane J), 202–3 (Dawson J), 216–17 (Toohey J).

^[107] Ibid 192 (Mason CJ and Wilson J).

^[108] Queensland Wire Industries Pty Ltd v Broken Hill Pty Co Ltd (1987) 16 FCR 50, 68.

^[109] Queensland Wire [1989] HCA 6; (1989) 167 CLR 177, 193 (Mason CJ and Wilson J), 198 (Deane J), 203 (Dawson J), 217 (Toohey J).

^[110] [2003] HCA 10; (2003) 215 CLR 374, 458 (McHugh J).

^[111] TPA s 46(1).

^[112] See above nn 28–9 and accompanying text.

^[113] See, eg, below n 141 and accompanying text.

^[114] See above Part III(C).

^[115] Boral [2003] HCA 10; (2003) 215 CLR 374, 421 (Gleeson CJ and Callinan J).

^[116] Australian Competition and Consumer Commission v Boral Ltd [1999] FCA 1318; (1999) 166 ALR 410, 437 (Heerey J) (‘Boral First Instance’). This point was also addressed by Kirby J on appeal in the High Court: see ibid 480–1. For a discussion: see Geoff Edwards, ‘The Hole in the Section 46 Net: The Boral Case, Recoupment Analysis, the Problem of Predation and What to Do about It’ (2003) 31 Australian Business Law Review 151, 165.

^[117] Edwards, above n 116, 151–2.

^[118] Boral [2003] HCA 10; (2003) 215 CLR 374, 423 (citations omitted).

^[119] Ibid.

^[120] See especially Maureen Brunt, Economic Essays on Australian and New Zealand Competition Law (2003) 194.

^[121] [2003] HCA 10; (2003) 215 CLR 374, 459 (McHugh J).

^[122] (2006) 28 ATPR (Digest) 46‑268.

^[123] See above Part II.

^[124] See, eg, Boral [2003] HCA 10; (2003) 215 CLR 374, 398–9, 415, 417–19, 423 (Gleeson CJ and Callinan J), 433 (Gaudron, Gummow and Hayne JJ), 469–71, 474–80 (McHugh J), 491–2, 503 (Kirby J); Universal Music Australia Pty Ltd v Australian Competition and Consumer Commission [2003] FCAFC 193; (2003) 131 FCR 529, 542–3, 561, 564, 577 (Wilcox, French and Gyles JJ); Sita Qld Pty Ltd v Queensland [1999] FCA 793; (1999) 164 ALR 18, 29, 31–3 (Dowsett J); Singapore Airlines Ltd v Taprobane Tours WA Pty Ltd [1991] FCA 621; (1991) 33 FCR 158, 178–9, 183 (French J).

^[125] See, eg, Boral [2003] HCA 10; (2003) 215 CLR 374, 398 (Gleeson CJ and Callinan J); Universal Music Australia Pty Ltd v Australian Competition and Consumer Commission [2003] FCAFC 193; (2003) 131 FCR 529, 542, 567 (Wilcox, French and Gyles JJ); Sita Qld Pty Ltd v Queensland [1999] FCA 793; (1999) 164 ALR 18, 31 (Dowsett J); Singapore Airlines Ltd v Taprobane Tours WA Pty Ltd [1991] FCA 621; (1991) 33 FCR 158, 170, 179, 181 (French J).

^[126] See, eg, Boral [2003] HCA 10; (2003) 215 CLR 374, 423 (Gleeson CJ and Callinan J), 471 (McHugh J), 493–4, 513 (Kirby J); Universal Music Australia Pty Ltd v Australian Competition and Consumer Commission [2003] FCAFC 193; (2003) 131 FCR 529, 561 (Wilcox, French and Gyles JJ); Sita Qld Pty Ltd v Queensland [1999] FCA 793; (1999) 164 ALR 18, 31 (Dowsett J); Singapore Airlines Ltd v Taprobane Tours WA Pty Ltd [1991] FCA 621; (1991) 33 FCR 158, 179 (French J).

^[127] See generally Seven Network Ltd v News Ltd (2007) ATPR (Digest) 46‑274.

^[128] See, eg, Australian Competition and Consumer Commission v Universal Music Australia Pty Ltd (2001) 115 FCR 442, 528, 530, 538 (Hill J); Universal Music Australia Pty Ltd v Australian Competition and Consumer Commission [2003] FCAFC 193; (2003) 131 FCR 529, 542, 561 (Wilcox, French and Gyles JJ); Boral [2003] HCA 10; (2003) 215 CLR 374, 496 (Kirby J); Rural Press Ltd v Australian Competition and Consumer Commission [2002] FCAFC 213; (2002) 118 FCR 236, 263 (Whitlam, Sackville and Gyles JJ).

^[129] 127 S Ct 1069 (2007).

^[130] [2003] HCA 10; (2003) 215 CLR 374.

^[131] Boral First Instance [1999] FCA 1318; (1999) 166 ALR 410, 415–16 (Heerey J). See also ibid 395 (Gleeson CJ and Callinan J), 443–4 (McHugh J).

^[132] Boral First Instance [1999] FCA 1318; (1999) 166 ALR 410, 413–14 (Heerey J). See also Boral [2003] HCA 10; (2003) 215 CLR 374, 396–7 (Gleeson CJ and Callinan J), 444–5 (McHugh J).

^[133] Boral First Instance [1999] FCA 1318; (1999) 166 ALR 410, 419–20 (Heerey J). See also Boral [2003] HCA 10; (2003) 215 CLR 374, 446 (McHugh J).

^[134] Boral First Instance [1999] FCA 1318; (1999) 166 ALR 410, 422 (Heerey J).

^[135] Ibid 433 (Heerey J).

^[136] Ibid 436–40.

^[137] Ibid 436.

^[138] Australian Competition and Consumer Commission v Boral Ltd (2000) 106 FCR 328, 379–80 (Beaumont J), 390 (Merkel J), 417 (Finkelstein J).

^[139] TPA s 46(1).

^[140] See above n 107 and accompanying text.

^[141] [1999] FCA 1318; (1999) 166 ALR 410, 440.

^[142] [2003] FCAFC 149; (2003) 129 FCR 339, 408–9 (Heerey and Sackville JJ).

^[143] Boral [2003] HCA 10; (2003) 215 CLR 374, 440 (Gaudron, Gummow and Hayne JJ), 462–70 (McHugh J),

502–6 (Kirby J).

^[144] Boral First Instance [1999] FCA 1318; (1999) 166 ALR 410, 441–2 (Heerey J).

^[145] Boral [2003] HCA 10; (2003) 215 CLR 374, 469–70 (emphasis in original) (citations omitted).

^[146] Boral First Instance [1999] FCA 1318; (1999) 166 ALR 410, 438–9 (Heerey J).

^[147] Trade Practices Act Review Committee, Australia, Review of the Competition Provisions of the Trade Practices Act (2003) 88 (‘Dawson Committee’).

^[148] See generally Explanatory Memorandum, Trade Practices Legislation Amendment Bill [No 1] 2007 (Cth) 3–4.

^[149] TPA s 46(1), as amended by Trade Practices Legislation Amendment Act [No 1] 2007 (Cth) sch 2 pt 1 cl 1.

^[150] TPA s 46(3A), inserted by Trade Practices Legislation Amendment Act [No 1] 2007 (Cth) sch 2 pt 1 cl 2.

^[151] TPA s 46(3D), inserted by Trade Practices Legislation Amendment Act [No 1] 2007 (Cth) sch 2 pt 1 cl 2.

^[152] TPA s 46(3C)(a), inserted by Trade Practices Legislation Amendment Act [No 1] 2007 (Cth) sch 2 pt 1 cl 2.

^[153] TPA s 46(1AA) (emphasis added). An anti‑competitive purpose includes, and is identical to, the three proscribed purposes under s 46(1): see TPA ss 46(1AA)(a)–(c); see also above nn 95–6 and accompanying text.

^[154] See above nn 28–9 and accompanying text.

^[155] [1989] HCA 6; (1989) 167 CLR 177. For a discussion of the case: see above Part IV.

^[156] (1990) 21 FCR 385.

^[157] (2004) 219 CLR 90.

^[158] (2001) 205 CLR 1.

^[159] Ibid 11 (Gleeson CJ, Gummow, Hayne and Callinan JJ).

^[160] Ibid 11–12 (Gleeson CJ, Gummow, Hayne and Callinan JJ).

^[161] Robert Hicks Pty Ltd (t/a Auto Fashions Australia) v Melway Publishing Pty Ltd (1999) 21 ATPR 41‑668, 42 516–17 (Merkel J).

^[162] Ibid.

^[163] Ibid 42 517–18 (Merkel J).

^[164] Ibid.

^[165] Ibid. Merkel J eventually held that Melway’s refusal to supply was taking advantage of a substantial degree of market power for a proscribed purpose under s 46(1) of the TPA, notwithstanding Melway’s claim that it was only implementing its distribution system: ibid 42 523–5.

^[166] See generally TPA pt VII div 1.

^[167] See generally TPA pt VII div 2.

^[168] See, eg, above n 141 and accompanying text.

^[169] Melway Publishing Pty Ltd v Robert Hicks Pty Ltd [1999] FCA 664; (1999) 90 FCR 128, 134 (Heerey J). A majority of the High Court ‘preferred’ the reasoning of Heerey J: see Melway Publishing (2001) 205 CLR 1, 26 (Gleeson CJ, Gummow, Hayne and Callinan JJ).

^[170] Melway Publishing Pty Ltd v Robert Hicks Pty Ltd [1999] FCA 664; (1999) 90 FCR 128, 142 (Sundberg J), 147 (Finkelstein J). Heerey J dissented: at 137.

^[171] Melway Publishing (2001) 205 CLR 1, 29 (Gleeson CJ, Gummow, Hayne, Callinan JJ). Kirby J dissented: at 48–9.

^[172] Ibid 13 (Gleeson CJ, Gummow, Hayne and Callinan JJ).

^[173] TPA s 46(1).

^[174] Melway Publishing (2001) 205 CLR 1, 27.

^[175] See above n 121 and accompanying text.

^[176] Melway Publishing (2001) 205 CLR 1, 28 (Gleeson CJ, Gummow, Hayne and Callinan JJ).

^[177] Ibid.

^[178] Ibid 26 (emphasis added).

^[179] [2003] HCA 75; (2003) 216 CLR 53, 76 (Gummow, Hayne and Heydon JJ).

^[180] (2004) 219 CLR 90. For a discussion of the case: see below Part IV(E)(2).

^[181] (1990) 21 FCR 385.

^[182] See generally Independent Committee of Inquiry into National Competition Policy, Australia, National Competition Policy (1993) 239–68.

^[183] See generally TPA pt IIIA div 3.

^[184] TPA ss 45(2)(a)(ii), 47(10)(a).

^[185] (2000) 22 ATPR 41‑752.

^[186] (2005) 27 ATPR 42‑066.

^[187] See above Part IV(C).

^[188] (2000) 22 ATPR 41‑752.

^[189] Ibid 40 700–1 (French J).

^[190] Stirling Harbour Services Pty Ltd (ACN 008 767 600) v Bunbury Port Authority (2000) 22 ATPR 41‑783, 41 266 (Burchett and Hely JJ).

^[191] Stirling Harbour (2000) 22 ATPR 41‑752, 40 704 (French J).

^[192] SHS claimed that the BPA’s misuse of market power was in contravention of s 46 of the TPA (which prohibits a corporation with substantial power in a market from taking advantage of that power for any one of three proscribed purposes): see ibid 40 710–11 (French J).

^[193] SHS claimed that the exclusive towage agreement was in contravention of s 45 of the TPA (which prohibits contracts, arrangements or understandings which have the purpose or likely effect of substantially lessening competition) or s 47 of the TPA (which prohibits the imposition of certain conditions — essentially of a vertical nature — where to do so has the purpose or likely effect of substantially lessening competition): see Stirling Harbour (2000) 22 ATPR 41‑752, 40 710 (French J).

^[194] Stirling Harbour (2000) 22 ATPR 41‑752, 40 734 (French J).

^[195] Ibid.

^[196] Ibid.

^[197] Stirling Harbour Services Pty Ltd (ACN 008 767 600) v Bunbury Port Authority (2000) 22 ATPR 41‑783, 41 276–7 (Burchett and Hely JJ). Carr J decided that the BPA, in granting the exclusive licence, was exercising market rather than regulatory power but agreed with Burchett and Hely JJ that there was no breach of s 46 of the TPA: at 41 282–3.

^[198] (2005) 27 ATPR 42‑066.

^[199] Ibid 42 977, 42 986–7 (Allsop J).

^[200] Ibid 42 978, 42 987 (Allsop J). Gambro Proprietary Limited, an Australian subsidiary of a Swedish company, initially operated a plant in Australia but later entered into a tolling arrangement with Baxter for some products and imported the balance: at 43 012 (Allsop J). Fresenius Medical Corporation Proprietary Limited, an Australian subsidiary of a German company, had planned an Australian plant but did not proceed with this, instead importing product: at 43 013

–14 (Allsop J).

^[201] Some contracts were awarded with an allowance of up to 10 per cent of PD products to be purchased from other suppliers: see Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd [2006] FCAFC 128; (2006) 153 FCR 574, 582–3 (Mansfield, Dowsett and Gyles JJ).

^[202] Baxter Healthcare (2005) 27 ATPR 42‑066, 42 998–43 010 (Allsop J).

^[203] Ibid 42 974–80 (Allsop J). The same conduct was claimed by the ACCC to contravene s 47 of the TPA: at 42 980–2 (Allsop J).

^[204] Ibid 43 047–9 (Allsop J). ‘Sterile fluids’ was used throughout the proceedings to refer to LVP fluids together with parenteral nutrition (‘PN’) fluids and irrigating solutions (‘IS’) fluids: at 42 974 (Allsop J).

^[205] Ibid 43 049–51 (Allsop J).

^[206] Ibid 43 050 (Allsop J).

^[207] Ibid.

^[208] Ibid.

^[209] Ibid.

^[210] Ibid.

^[211] Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd [2006] FCAFC 128; (2006) 153 FCR 574, 586–99 (Mansfield, Dowsett and Gyles JJ).

^[212] The Crown in right of the states and territories is only bound by pt IV of the TPA ‘so far as [it] carries on a business’: see TPA s 2B(1)(a).

^[213] Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd (2007) 237 ALR 512, 533 (Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ). Kirby J agreed with this conclusion: at 550–1. Callinan J dissented, finding that Baxter had a derivative immunity stemming from the SPAs’ exclusion from the provisions of the TPA: at 556–8.

^[214] [2003] HCA 75; (2003) 216 CLR 53.

^[215] Ibid 64–5 (Gummow, Hayne and Heydon JJ).

^[216] Australian Competition and Consumer Commission v Rural Press Ltd (2001) 23 ATPR 41‑804, 42 719 (Mansfield J).

^[217] Ibid.

^[218] Ibid.

^[219] Ibid 42 720–6 (Mansfield J). See also Rural Press [2003] HCA 75; (2003) 216 CLR 53, 66–7 (Gummow, Hayne and Heydon JJ).

^[220] Australian Competition and Consumer Commission v Rural Press Ltd (2001) 23 ATPR 41‑804, 42 728 (Mansfield J).

^[221] Ibid 42 739–43.

^[222] Rural Press Ltd v Australian Competition and Consumer Commission [2002] FCAFC 213; (2002) 118 FCR 236, 279 (Whitlam, Sackville and Gyles JJ).

^[223] Rural Press [2003] HCA 75; (2003) 216 CLR 53, 76–8 (Gummow, Hayne and Heydon JJ). Gleeson CJ and Callinan JJ agreed with the joint reasons of Gummow, Hayne and Heydon JJ: at 60. Kirby J dissented: at 98–105.

^[224] Ibid 76 (Gummow, Hayne and Heydon JJ).

^[225] TPA s 46(1).

^[226] (2004) 219 CLR 90.

^[227] Ibid 97–8 (McHugh ACJ, Gummow, Callinan and Heydon JJ).

^[228] Ibid 107–8 (McHugh ACJ, Gummow, Callinan and Heydon JJ).

^[229] NT Power Generation Pty Ltd v Power and Water Authority [2001] FCA 334; (2001) 184 ALR 481, 555–6 (Mansfield J).

^[230] Ibid 544–9.

^[231] NT Power Generation Pty Ltd v Power and Water Authority [2002] FCAFC 302; (2002) 122 FCR 399, 403–5 (Lee J), 414–22 (Bowen J). Finkelstein J dissented on this point: at 430–5.

^[232] NT Power (2004) 219 CLR 90, 108–23 (McHugh ACJ, Gummow, Callinan and Heydon JJ).

^[233] TPA s 46(1).

^[234] NT Power Generation Pty Ltd v Power and Water Authority [2002] FCAFC 302; (2002) 122 FCR 399, 449 (Finkelstein J).

^[235] Ibid 450.

^[236] NT Power (2004) 219 CLR 90, 136 (McHugh ACJ, Gummow, Callinan and Heydon JJ).

^[237] Ibid 144 (McHugh ACJ, Gummow, Callinan and Heydon JJ).

^[238] [1989] HCA 6; (1989) 167 CLR 177.

^[239] See above n 88 and accompanying text.

^[240] TPA s 46.

^[241] [2003] HCA 10; (2003) 215 CLR 374.

^[242] Hay, ‘Boral — Free at Last’, above n 18, 327.

^[243] This is not to suggest that US courts never make mistakes. There are many trial court or appellate court decisions that are overturned, but this is very likely due largely to the system of trial by jury. When a trial court decision is overturned it is normally because the appellate court thinks that the trial judge did not do enough to limit the discretion of the jury to find in favour of the plaintiff.