Are Corporations with a Substantial Degree of Market Power Free to Choose Their Distributors and Customers?

Abstract

Under what circumstances can a corporation with a substantial degree of market power refuse to supply goods or services to a distributor or customer? This is perhaps the most vexed question in the whole area of Trade Practices Law. It is a question which was not discussed in the Explanatory Memorandum accompanying the Trade Practices Revision Bill 1986 which gave s.46 its current form. It is a question on which the Trade Practices Consultative Committee (the Blunt Committee) made no recommendation in its report because it was not convinced that any workable solution was available. It is a question on which the Standing Committee on Legal and Constitutional Affairs (the Griffiths Committee) is now hearing evidence. It is a question that the High Court of Australia is considering at the time of writing, after hearing argument in Queensland Wire Industries Pty Ltd v. The Broken Hill Proprietary Co. Ltd & Anon on 29 and 30 June 1988. It is a question that the Trade Practices Commission (TPC) has to consider frequently since small business often complain that their position in the market has been adversely affected by their inability to obtain supplies due to others refusing to deal with them. It is not, however, a question to which a complete answer can be given in the present amorphous state of the law.