ACCC Institutes Action against Calvary for Exclusive Dealing Conduct
Friday 30 October 2015 @ 9.23 a.m. | Legal Research | Trade & Commerce
The Federal Court has declared that Little Company of Mary Health Care Ltd (LCMHC) and Calvary Health Care Riverina Ltd (Calvary Riverina) (jointly known as Calvary) engaged in exclusive dealing conduct that was likely to have an anti-competitive effect in the supply of day surgery services in Wagga Wagga.
Calvary’s conduct related to the adoption of by-laws concerning the accreditation of medical practitioners to use Calvary medical facilities.
Background
The Australian Competition and Consumer Commission (ACCC) alleges by-laws from March 2011 allowed Calvary to refuse to grant, or to revoke the right of a medical practitioner to use its facilities, if the doctor became involved in a business in competition with Calvary.
A new day surgery opened in 2015 in competition with Calvary private hospital and the Calvary day surgery.
The Court declared that by engaging in this conduct, LCMHC and Calvary Riverina contravened s 47 of the Competition and Consumer Act 2010 (Cth) (the Act) as the conduct had the likely effect of substantially lessening competition in the day surgery market in Wagga Wagga and its surrounding areas.
LCMHC has given an undertaking to the Court to delete the clauses of the by-laws of concern to the ACCC.
About Exclusive Dealing Conduct
Section 47 of the Act prohibits various forms of exclusive dealing. Broadly, it captures two types of anti-competitive vertical transactions:
(1) the conditional supply (or acquisition) of goods or services (conditions may relate to the ability to re-supply, exclusivity, limits on ability to acquire from competitors etc)
(2) refusing to supply for specified reasons (eg, because purchaser refuses to agree to a conditional supply).
Most forms of exclusive dealing (including full line forcing) are captured only if it can be demonstrated that they substantially lessen competition (s 47(10)). However, third line forcing is captured regardless of its anti-competitive effect.
Comment from the ACCC
Commenting on this case in a recent ACCC Media Release, Chairman of the ACCC, Rod Sims said:
“This is an important outcome for consumers who use day surgery services and the ACCC welcomes the Court’s declaration. For patients of day surgery services, a larger number of surgeries reduces waiting lists and costs, and allows for increased choice and access for patients to surgical procedures. Calvary’s undertaking gives medical practitioners greater surety in future dealings with Calvary and will enable stronger competition in the day surgery market.”
Court orders penalties against Calvary
The Court also ordered Calvary to pay part of the ACCC’s costs of the proceeding, in the amount of $100,000. LCMHC and Calvary Riverina agreed to joint submissions and a statement of agreed facts to be filed with the Court, and consented to the orders made by the Court. The ACCC is seeking pecuniary penalties, declarations and costs.
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Sources:
ACCC Taking Action Against Calvary For Limiting Competition
Calvary agrees to remove exclusive dealing bylaws following ACCC action – ACCC Release MR 203/15
ACCC accuses Wagga Wagga's Calvary Hospital of trying to prevent competition – abc.net.au
