Ramsay Health Care: ACCC Takes Action over Alleged Abuse of Market Power

Friday 5 May 2017 @ 9.40 a.m. | Legal Research | Trade & Commerce

The Australian Competition and Consumer Commission (ACCC) has instituted proceedings in the Federal Court against Ramsay Health Care Australia Pty Limited (Ramsay) for alleged anti-competitive conduct involving misuse of market power and exclusive dealing in the Coffs Harbour (NSW) region.

About Ramsay Health Care

Ramsay is wholly owned by Ramsay Health Care Limited which is an ASX-listed global healthcare provider with reported revenue of $8.7 billion for the last financial year. It is Australia’s largest private hospital operator with about 70 hospitals and day surgeries nationwide. Each year, Ramsay facilities in Australia admit almost one million patients and account for more than half a million procedures.

Ramsay operates Baringa Private Hospital and the Coffs Harbour Day Surgery, the only private hospital and private day surgery facilities in the Coffs Harbour region. Coffs Harbour surgeons use operating theatres at Ramsay’s facilities to perform surgical procedures on private patients.

The Allegations

The ACCC alleges Ramsay became aware that a group of Coffs Harbour surgeons were planning to establish a competing private day surgery facility in Coffs Harbour. In response to this competitive threat, the ACCC alleges senior Ramsay executives told these surgeons that if they were involved with the proposed new day surgery they would have their access to operating theatre time at Baringa Hospital substantially reduced or withdrawn.

The ACCC alleges that Ramsay engaged in this conduct for the purpose of deterring or preventing a new entrant in the day surgery market in Coffs Harbour, or substantially lessening competition in that market.

Reaction from the ACCC

In a recent ACCC Media Release, ACCC Chairman Rod Sims said:

“The ACCC alleges that Ramsay sought to preserve its position in day surgery services in the Coffs Harbour region by making threats to reduce or withdraw individual surgeons’ access to operating theatres at Baringa Hospital if they were involved in a competing day surgery facility. It is alleged that the surgeons suspended their plans to establish a competing day surgery facility as a result of these threats. New independent day surgeries in other areas have increased competition, reduced waiting lists and costs, delivered greater choice, and improved access to surgical procedures. It is vital to ensure such competition is not stamped out by established operators. Misuse of market power and other anti-competitive practices can cause significant harm to consumers, other businesses, and the competitive process more generally, which is why we believe this is an important case for us to take.”

Statement from Ramsay Health Care

Responding to the allegations in a statement, Ramsay said it took its obligations under the Competition and Consumer Law [ACL] [Sch 2 to the Competition and Consumer Act 2010 (Cth)] seriously and had cooperated with the ACCC. It also said it intended to "vigorously defend the matter”:

"As this is now before the court, Ramsay will not be making any further comment on the allegations other than as required to keep the market informed.”

The ACCC is seeking pecuniary penalties, declarations, compliance program orders, and costs.

The ACCC has previously taken successful action in relation to exclusive dealing conduct in this sector. In October 2015, the Federal Court declared that Little Company of Mary Health Care Ltd (LCMHC) and Calvary Health Care Riverina Ltd (Calvary Riverina) had engaged in exclusive dealing conduct that was likely to have an anti-competitive effect in the supply of day surgery services in Wagga Wagga.

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Ramsay taken to court over alleged market power abuse – coffscoastadvocate.com.au

ACCC takes action against Ramsay Health Care for alleged anti-competitive conduct – ACCC Release MR 54/17

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