Competition Law: Privy Council's Interpretation of Monopolisation Provisions of s36 Commerce Act 1986

Abstract

The abuse of market power by monopolists has long been a central concern of competition laws. However the formulation and application of an appropriate rule against monopolisation has proven to be highly problematic largely because it is difficult to differentiate between vigorous competition (which will benefit consumers) and unlawful monopolisation (which will ultimately harm consumers). The problem is that both of these forms of competition can look alike. Section 36 of the Commerce Act 1986 prohibits persons with a substantial degree of market power from taking advantage of such power for the purpose of restricting preventing deterring or eliminating competition. Accordingly the provision involves a preliminary market power threshold inquiry followed where relevant by an inquiry into whether the conduct in question may properly be characterised as having the purpose of taking advantage of that power. This commentary focuses on this second inquiry namely whether the conduct of a fi rm with a substantial degree of market power can be characterised as monopolistic.