Resources of Agency and Competition Law †MyAssignmenthelp.com

Question: Discuss about the Resources of Agency and Competition Law. Answer: Introduction The case was related to ANZs wish that Mortgage refunds agree to limit the refund amount for the customers in respect of arranging ANZ home loans. Australia and New Zealand Banking Group Limited is providing the mortgage loans to customers through internet and external channels. Mortgage refunds are an independent firm which is engaged in the distribution of mortgages of ANZ. Mortgage refunds are offering refund to customers from some part of its commission if its mortgages are approved by ANZ (MacCallum, 2016). The ACCCs claim was that ANZ is providing loan arrangement facilities to its customers internally. ACCC had fought two cases of fixing of prices. One was against Fight centre and other was against ANZ. In the case related to Fight centre, the Australian Competition and Consumer Commission alleged that Fight centre entered into contract with three airlines to maintain the prices for air travel. This report describes in detail the facts of the case, the duties breached by ANZ, the decision of Full Federal court and the reasons behind the decision. ACCCs main aim is to avoid anti-competition agreements. As per ACCCs allegation, ANZ was indulging in the price fixing. ACCC alleged that Australia and New Zealand Banking Group Limited made an agreement that it is going to only allow Mortgage Refunds to offer Australia and New Zealand Banking Group Limited mortgage products if the Mortgage refunds agreed on the terms and conditions of Australia and New Zealand Banking Group Limited. The terms and conditions include that Mortgage refunds was required to limit the amount of refund to its customers to $600 for the arrangement of loan services and it will allow Australia and New Zealand Banking Group Limited branches to match the deal if they chose to waive the Australia and New Zealand Banking Group Limiteds loan establishment fee (Adams, 2016). As per ACCC, Mortgage refunds and Australia and New Zealand Banking Group Limited were competitors in the market for the provision of services related to loan provisions. Full Federal Courts decision The courts decision was in favour of Australia and New Zealand Banking Group Limited .The Full court of the Federal court of Australia dismissed the price fixing appeal made by the Australian competitive and consumer commission. The Full court dismissed Australian Competitive and Consumer commissions allegation against the Australian and New Zealand Banking Group Limited for breaching the provisions of price fixing under Competition and Consumer act, 2010 (ACL, 2015). The court has given the decision that ANZ did not complete with Mortgage refunds and other independent mortgage brokers. The full court also observed that The competition can be possible for the internal and external distribution channels. The court also ordered that ACCCs priority is to avoid anti-competitive practices and agreements because impeding competition damages the businesses and consumers and this is harmful for the entire economy. The Australian Competition and Consumer Commission appealed against the decisi on given by the Federal court. As per the investigation of Australian Competition and Consumer Commission, ANZ breached the duty of care, improper use of information and the duty to act with diligence under the corporation law by fixing the prices. So, ANZ breached two laws, one was corporation law and the other was Competition and Consumer Act 2010 (Journals talk, 2016). ACCC was successful in its appeal against fight centre but was unsuccessful in the appeal against ANZ. The ACCC alleged that ANZ is liable for fixing of prices under section 45 of Trade Practices act, 1974 now it is Competition and Consumer act, 2010. The court held that price fixing applied to contracts between competitors. The ANZ and Mortgage refunds were not competitors so there were zero chances of price fixing between them. The court also stated that section 45A was not applicable on this case. Because this section says competition may occur between two parties with relevant arrangements. Section 45A applies when two parties are having relevant arrangements with two profit centres and there will be two separate entities of both the parties. These conditions are not satisfied in this case (Yuile, 2017). So, ANZ is not liable under section 45A. The decision of the court was clear after Justice Dowsetts says that between the loan arrangement services of ANZ and Mortgage refunds, there was no competitive overlap. Reaction of ACCC against the judgement ACCC was not satisfied with the judgement given by the full federal court. ACCC reacted against the judgement given by the full federal court. According to ACCC, there was no issue with healthy competition because healthy competition brings prices down, results in innovation and better quality services to the customers. This type of competition leads to various types of advantages to customers. But the competition that was in this case results in factors that harm the interests of consumers. According to ACCC, in this case, both Mortgage refunds and ANZ were dealing in loan services. So, it was the proof for the fixing of prices. The major reason behind federal courts decision in favour of ANZ was the lack of evidence with ACCC (Akman and Sokol, 2017). ANZ did not show any evidence in its defence because ANZ was aware about the fact that the case was not strong from the side of ACCC because ACCC was putting allegation without evidence. As per the rules and regulations of court, a cas e without evidence was considered as irrelevant. It was impossible for ACCC to prove that ANZ breached the duties under Competition and Consumer act, 2010. ACCC argued that the fixing of prices between Australia and New Zealand Banking Group Limited and Mortgage refunds took place because ANZ and Mortgage refunds are competitors in the market for providing loan arrangement services (Varney, 2016). But the court found that Australia and New Zealand Banking Group Limited and Mortgage refunds were not the competitors for the loan arrangement services provisions in the market. So, Australia and New Zealand Banking Group Limited was not held liable for any price fixing agreement. ACCC alleged that Australia and New Zealand Banking Group Limited was competing with other brokers in the market. The court again dismissed this allegation of ACCC by stating that ANZ was not involved in the marketing of any loan services against the brokers. The court found Australia and New Zealand Banking Group Limited innocent in both the allegations made by Australian Competition and Consumer Commission. So, these were the reasons behind the court decision favo uring Australia and New Zealand Banking Group Limited (McHugh and Foster, 2016). The case against Fight centre was also related to fixing of prices. The Federal court decided against the Fight centre because according to the full federal court, the fight centre was in competition with other airlines for booking services. So, there were chances that Fight centre was engaged in price fixing. The reason behind the judgement of full federal court against ACCC in this case was that the court found that ANZ was not in competition with the Mortgage refunds. So, without having competition in the market, the chances of fixing of price do not arise. The reason behind the positive outcome of Fight centre case was that ACCC was confident about the success because of proper evidences at that time (Oliver and Schoff, 2017). In Fight centre case, ACCC was hoping courts judgement in its favour but in this case, ACCC was doubtful about the favourable decision of the court. Duties breached by ANZ This is the case of price fixing. In price fixing, the competitors agree on a same price rather than competing with each other. The duties breached by Australia and New Zealand Banking Group Limited include duty not to use the information in improper manner, duty related to good faith and duty of care. The reason behind the establishment of Australian Competition and Consumer Commission is to give protection to the interests of consumers (Le Roy, et al., 2017). In this case, Australia and New Zealand Banking Group Limited breached three duties which affect the consumers at the end. The first duty breached because of fixing of prices is duty not to use information in improper manner, Australia and New Zealand Banking Group Limited used the market information for illegal purpose and fixed the prices by properly understanding the consumer preferences. The second breached duty is duty related to good faith. Every industry which is operating in the market is expected to conduct its busine ss with proper rules and regulation, honesty and without harming the interests of consumers. Price fixing is against of all these principles. The last duty that was breached by Australia and New Zealand Banking Group Limited is duty of care. Customers are the main motive of every business (Stellios and Richman, 2016). Customers should be attracted with duty of care. This duty is attached with the business from the day of set-up of the business. Every organization is required to handle the customers with care. By fixing of prices, ANZ breached this duty because fixing of prices ultimately results in the loss to customers. Impact of courts decision on the operating of companies in Australia Price fixing by one company affects the consumers and other companies operating in the same market. For example: if consumer goods are transported by freight and if there is fixing of price of freight then it results in affecting the whole chain of supply and increases the prices of goods. In this way price fixing affects the market and the companies operating in the market as a whole. Price fixing is illegal under the Competition and Consumer act, 2010 in Australia (Petrucci, 2017). This decision impacted the other companies operating in the same industry because this competition was not a healthy competition. It is an impending competition that resulted from anti-competitive practices between Mortgage refunds and ANZ. Conclusion According to the report, the ACCC vs ANZ case is related to price fixing. Price fixing is an illegal activity as per the corporation law and Competition and consumer act, 2010. The decision in this case was against Australian Competition and Consumer Commission and in favour of ANZ. ACCC is unsuccessful in its allegation because there is no evidence for such price fixing with Australian Competition and Consumer Commission. This was the major factor behind the failure of Australian Competition and Consumer Commission. Australian Competition and Consumer Commission were unable to prove that Mortgage refunds and ANZ were the competitors for loan arrangement services. Australian Competition and Consumer Commission fought two cases of price fixing against Fight centre and ANZ. ACCC succeed in its case against Fight centre because at that time, the court had sufficient proof that Fight centre and other airlines services were competitors in the market. One thing that needs to be focused in this case is that careful consideration should be given to evidence. References ACL (2015) ACCC v ANZ Ltd. [Online]. Available at: https://www.australiancompetitionlaw.org/cases/2013anz.html (Assessed: 22 September, 2017). Adams, M.A. (2016) Contemporary case studies in corporate governance failures, Governance Directions, 68(6), p.335. Akman, P. and Sokol, D.D. (2017) Online RPM and MFN Under Antitrust Law and Economics, Review of Industrial Organization, 50(2), pp.133-151. Journals talk (2016) Australian Journal of Competition and Consumer Law update. [Online]. Available at: https://sites.thomsonreuters.com.au/journals/2016/03/20/australian-journal-of-competition-and-consumer-law-update-march-2016-2/ (Assessed: 22 September, 2017). Le Roy, F., Sentis, P. and Jerson, A. (2017) The Impact of Conviction for Anti?Competitive Practices on Firm Valuation: A Contingency Approach, Managerial and Decision Economics, 38(4), pp.534-546. MacCallum, W. (2016) Accessorial liability of board members, Governance Directions, 68(3), pp.164. McHugh, N. and Foster, C. (2016) Collaborations among competitors in energy and resources projects-a competition law primer, Australian Resources and Energy Law Journal, 35(1), p.20. Oliver, J. and Schoff, P. (2017) Agency and Competition Law in Australia Following ACCC vs Flight Centre Travel Group, Journal of European Competition Law Practice, 8(5), pp.321-328. Petrucci, C. (2017) Subsidiarity in Directive 2014/104 EU on damages actions for breach of EU competition law, European Public Law, 23(2), pp.395-421. Stellios, K. and Richman, A. (2016) Competition law: Extending the reach of Australia's cartel laws, Governance Directions, 68(8), pp.494. Varney, C. (2016) The Cartels and Leniency Review. Law Business Research Limited. Yuile, A. (2017) Case notes: High court judgments, Ethos: Official Publication of the Law Society of the Australian Capital Territory, (243), pp.52.