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Published online by Cambridge University Press: 24 January 2025
The notion of the relevant market, together with the process for identifying it, is a construct used in competition law in order to determine whether competition exists between two or more producers for the purposes of Part IV of the Trade Practices Act 1974 (Cth).
This legislation confers upon the courts and the Trade Practices Tribunal the duty to decide whether certain courses of conduct have the purpose, or have (or are likely to have) the effect, of substantially lessening competition in a market. The market delineation process provides the first in a set of stepping-stones which enable the courts to discharge this task in the principled and certain manner that is required by the doctrine of the rule of law. The procedures comprised within it enable the court (or other trier of fact) to organise complex fact situations and classify them in such a way as to enable competition policy, as embodied in legislation such as the Trade Practices Act, to be intelligently applied. It permits a degree of quantitative evaluation which in practice would not be possible if the lessening-of-competition issue were attacked directly.
1 Walker, G de Q, “Product Market Definition in Competition Law” (1980) 11 FL Rev 386Google Scholar (hereinafter cited as Product Market).
2 (1911) 221 1, 106.
3 (1945) 148 F 2d 416; Upshaw, W, “The Relevant Market in Merger Decisions: Antitrust Concept or Antitrust Device?”, (1966) 60 Nw UL Rev 424, 428-434.Google Scholar
4 Areeda, P and Turner, D, Antitrust Law (Boston 1978), Vol 2, 355Google Scholar. One of the authors refers to this work as “the Bible”: Turner, D “The Role of the 'Market Concept' in Antitrust Law” (1980) 49 Antitrust LJ 1145,1147Google Scholar.
5 Elzinga, K and Hogarty, T, “The Problem of Geographic Market Delineation in Anti-Merger Suits”, (1973) XVIII Antitrust Bulletin 45CrossRefGoogle Scholar (hereinafter cited as “Elzinga I”), 47-48.
6 (1982) 3 ATPR 43,912.
7 Ibid 43,916.
8 Ibid.
9 Australian Associated Stock Exchanges [1982] ATPR (Com) 55 431.
10 Ibid 55,441.
11 Cf Amalgamated Television Services Pty Ltd [1980] ATPR (Com) 17,076; United State v Columbia Pi_ctures Corp (1960) 189 F Supp 153, 192-193; Times-Picayune Publzshmg Co v United States (1953) 345 US 594. see Walker, “Current Topics” (1980) 54 ALI 57Google Scholar.
l2 This rule of thumb has received recognition in the 1982 Merger Guidelines issued by the United States Department of Justice and Federal Trade Commission: (1982) TRR No 546, 15.
13 Product Market, 390-392.
14 Brown, G, “Relevant Geographic Market Delineation” [1979] Duke LJ 1152, 1181.CrossRefGoogle Scholar
15 (1982) 3 ATPR 43,872.
16 Ibid 43,888.
17 Ibid 43,901.
18 Re Howard Smith Industries Pty Ltd (1977) 28 FLR 385; 1 ATPR 17,324, 17,336.
19 See eg Brown Shoe Co v United States (1962) 370 US 294; Andra Investments[1975] ATPR (Com) 8,806.
20 (1978) 32 FLR 305, 2 ATPR 17,705.
21 Cf Marnell v United Parcel Service, 1971 Trade Cases 73,761.
22 2 ATPR at 17,710; Werden, G, “The Use and Misuse of Shipments Data in Defining Geographic Markets” (1981) XXVI Antitrust Bulletin 719, 725-727CrossRefGoogle Scholar.
23 (1977) 1 ATPR 17,324.
24 Re Broken Hill Proprietary Co Ltd (1981) 3 ATPR 42,807.
25 Ibid 42,835.
26 Ibid 42,824-42,825, 42,835.
27 Ibid 42,825.
28 Ibid 42,828.
29 Ibid 42,825.
30 A similar error was made in the Canadian case R v KC Irving Ltd (1976) 45 DLR 3d 45, 76; see Roberts, R, Anticombines and Antitrust (Toronto 1980), 114-115;Google Scholar Product Market, 392-393, 401.
31 1979 2 Trade Cases 79,138, 79,147.
32 (1977) 1 ATPR 17,324.
33 Ibid 17,326.
34 Ibid 17,336, (italics added).
35 Ibid 17,337, (italics added).
36 United States v Grinnell Corp (1966) 384 US 563.
37 United States v Pabst Brewing Co (1966) 384 US 546.
38 Supra n 19.
39 Upshaw, supra, n 3, 461; Posner, R, Antitrust Law (Chicago 1976), 129-130Google Scholar; Areeda and Turner, supra n 4,411; Product Market 414-416.
40 (1982) 3 ATPR 43,699.
41 Ibid 43,703.
42 Ibid 43,705.
43 Outboard Marine Australia Pty Ltd v Hecar Investments No 6 Pty Ltd (1982) 3 ATPR 43,980.
44 Supra n 4, 355-358.
45 Ibid 355.
46 Ibid 357.
47 Marshall, A, Principles of Economics (8th ed 1920), 324-325.CrossRefGoogle Scholar
48 Steiner, P, “Markets and Industries”, International Encyclopaedia of the Social Sciences (New York 1968) Vol 9, 575, 577Google Scholar.
49 Areeda and Turner, supra n 4, 356.
50 (1977) 1 ATPR 17,445, 17,460.
51 Areeda and Turner, supra n 4, 358.
52 See Product Market, 400.
53 (1969) 1 Journal of Reprints for Antitrust Law and Economics 181, 184.
54 Report of the Task Force on Productivity and Competition (The Stigler Report) (1969) 1 Journal of Reprints for Antitrust Law and Economics 827, 846-847.
55 Ibid 847.
56 Supra n 39, 133.
57 United States v Pabst Brewing Co (1966) 384 US 546.
58 Areeda and Turner, supra n 4, 415.
59 Posner, supra n 39, 130.
00 Supra n 12, 21-25.
61 Re the European Sugar Cartel (1975) 17 CMLR 295.
62 Ibid 451-452.
63 [1975] ATPR (Com) 8,841.
64 Ibid 8,842.
65 [1977] ATPR (Com) 16,718.
66 (1979) 2 ATPR 18,174, 18,198-18,199; see also Carlton & United Breweries [1981] ATPR (Com) 56,501; Residential Developments Pty Ltd/Swan Brewery Co Ltd [1982] ATPR (Com) 55,407.
67 [1977] ATPR (Com) 16,718, 16,761.
68 [1975] ATPR (Com) 8,809.
69 Ibid 8,811.
10 (1977) 1 ATPR 17,324.
71 J Fenwick & Co Pty Ltd [1976] ATPR (Com) 16,507.
72 [1980] ATPR (Com) 17,076.
73 Ibid 17,086. Cf United States v Columbia Pictures Corp (1960) 189 F Supp 153; United States v Marine Bancorporation, Inc (1974) 418 US 602, 619-623.
74 [1977] ATPR (Com) 16,718.
75 Borough of Lansdale v Philadelphia Electric Co (1982) 43 ATRR (USA) 938.
76 (1979) 2 ATPR 18,333.
77 Ibid 18,356-18,358.
78 Supra n 20.
79 [1981] ATPR (Com) 55,201.
80 Supra n 4, 356.
81 Eg RSR Corp v Federal Trade Commission, 1979 2 Trade Cases 78,433.
82 See TPC v Nicholas, supra n 76.
83 United States v Addyston Pipe and Steel Co (1898) 85 Fed 271.
84 Europemballage Corp & Continental Can Co Inc v EC Commission [1973] CMLR 199; United Brands Co v EC Commission [1978] 1 CMLR 429.
85 Ruhrkohlen Verkaufs-GMBH v High Authority [1962] CMLR 113.
86 Ibid 154.
87 (1981) 3 ATPR 42,737.
88 Ibid 42,758.
89 Ibid.
90 Supra n 74.
91 (1979) 2 ATPR 18,199.
92 (1976) 1 ATPR 17,223.
93 Ibid 17,249: see also Pak Pacific determination, supra n 63.
94 Nashua Australia Pty Ltd [1975] ATPR (Com) 8,720; BHP/Linde Gas [1975] ATPR (Com) 8,608; Comeng Holdings Ltd [1975] ATPR (Com) 8,813.
95 Bankcard Scheme: Interbank Agreement [1980] ATPR (Com) 52,169, 52,178 ff.
96 Supra n 4, 358.
97 Note, “The Market: A Concept in Anti-Trust” (1954) 54 Col L Rev 580, 598.
98 Professor Elzinga takes the view that there are basically only two factors which prevent the market for any product from being worldwide. Transport! costs are one and legal barriers the other: Elzinga, , “Defining Geographic Market Boundaries” (1981) XXVI Antitrust Bulletin 739 (hereinafter cited “Elzinga III”), 740-741CrossRefGoogle Scholar.
99 Permewan Wright Consolidated Pty Ltd v Trewhitt (1979) 145 CLR 1; Walker, , Recent Cases (1980) 54 ALJ 356, 360-362Google Scholar.
100 Victorian Egg Marketing Board v Parkwood Eggs Pty Ltd (1978) 33 FLR 294, 2 ATPR 17,783.
101 Ibid.
102 General Motors Continental NV v EC Commission [1976] 1 CMLR 95, 109.
103 Supra n 61, 451-452.
104 Elzinga I, 67.
105 [1978] 1 CMLR 429, 484.
106 Ibid 485.
101 Ibid 451-452.
108 Ibid 459.
109 Ibid 484, 485.
110 United States v Philadelphia National Bank (1973) 374 US 321.
111 Ibid 358-359, 361.
112 Real Estate Institute of New South Wales [1980] ATPR (Com) 52,094, 52,100.
113 2 Trade Regulation Reporter 6,470-6,471.
114 (1978) 2 ATPR 18,333.
115 Ibid 18,356-18,357.
116 [1975JATPR (Com) 8,841.
117 Ibid.
118 (1981) 3 ATPR 42,737, 42,757.
119 Product Market, 416-418.
120 Elzinga I, developed further in Elzinga, K and Hogarty, T, “The Problem of Geographic Market Delineation Revisited: The Case of Coal” (1978) XXIII Anti-trust Bulletin 1Google Scholar (hereinafter “Elzinga 11”) and in Elzinga III.
121 (1973) 374 321.
122 Elzinga I, 67.
123 (1966) 384 US 563.
124 (1978) 32 FLR 305, 2 ATPR 17,705.
125 P Griffin and J Kushner, “Geographic Submarkets in Bituminous Coal” (1976) XXI Antitrust Bulletin 67; also Werden, supra n 22, and Benson, B, “Spatial Competition: Implications for Market Area Delineation in Antimerger Cases” (1980) XXV Antitrust Bulletin 729CrossRefGoogle Scholar.
126 (1977) 1 ATPR 17,445.
127 (1979) 2 ATPR 18,333.
128 (1981) 3 ATPR 42,807.
129 [1977] ATPR (Com) 16,718.
130 Supra n 18.
131 McDonald's System of Australia Pty Ltd v McWi/liams Wines Pty Ltd (1979) 2 ATPR 18,481, 18,512.
132 See Walker, , “Competition between Courts-Bane or Bounty?” (1981) 55 ALJ 312Google Scholar.
133 Benson, supra n 125.
134 Steiner, supra n 48, 577.
135 The contention in Ansett that there were local markets in effect failed the LIFO test. There was therefore no need to consider the LOFI element.
136 (1977) 1 ATPR 17,445.
137 (1979) 2 ATPR 18,333.
138 Bundaberg Bakers Distributing Co [1979] ATPR (Com) 15,554.
139 Bass Bakery Pty Ltd (1975) 1 ATPR 8,805.
140 Darwin Cinemas Pty Ltd [1977] ATPR (Com) 16,127, 16,131.
>141 See Donald, B and Heydon, J, Trade Practices Law, (1978) Vol 11, 461-462Google Scholar; Taperell, G, Vermeesch, R, , D Harland , Trade Practices and Consumer Protection, (2nd ed 1978) 384-386Google Scholar.
142 United States v General Dynamics Corp (1974) 415 US 485.
143 Product Market 395-396.
144 Eglohn Lysaght (Australia) Ltd [1978] ATPR (Com) 17,304.
145 (1945) 148 F 2d 416.
146 Sullivan, L, Handbook of the Law of Antitrust (St Paul 1977) 71.Google Scholar
147 (1981) 3 ATPR 42,807, 42,828.
148 In United States v Tracinda Investment Corp 1979 2 Trade Cases 79,138 the court described the market for the production of motion pictures as worldwide, but noted that the court could not look to worldwide effects for all purposes, since s 7 of the Clayton Act referred to any section of “the country”. The court would take account only of the extent to which the worldwide nature of the industry affected competition in the United States.