THE Full Court of the Federal Court has delivered its judgment on the Australian Competition & Consumer Commission’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.
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.
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 said.
The result of the Full Court’s decision is that Pacific National’s acquisition of the Acacia Ridge Terminal may proceed, without the access undertaking accepted by the trial judge.
“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,” Mr Sims said.
The ACCC’s case was that Pacific National’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. 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,” Mr Sims said.