Air New Zealand Ltd v Australian Competition and Consumer Commission

The High Court of Australia heard appeals from Air New Zealand Ltd and PT Garuda Indonesia Ltd concerning alleged contraventions of the *Trade Practices Act 1974* (Cth). The dispute arose from understandings reached between the airlines to impose surcharges and fees on unidirectional air cargo services supplied from ports of origin outside Australia to destination ports within Australia. The Australian Competition and Consumer Commission (ACCC) alleged that these understandings constituted price fixing and contravened sections 45 and 45A of the Act.

The central legal issues before the Court were whether the relevant market for the air cargo services was located "in Australia" for the purposes of the *Trade Practices Act*, and whether the airlines' conduct was compelled by foreign law or administrative practices, thereby potentially excusing them from liability. A further issue concerned the potential inconsistency between provisions of the *Air Navigation Act 1920* (Cth), which required airlines to comply with international air service agreements, and the prohibitions against anti-competitive conduct in the *Trade Practices Act*.

The Court reasoned that a market does not cease to be located in Australia simply because it encompasses areas outside Australia. The rivalrous behaviour of the airlines, which involved the supply and acquisition of services, was found to have occurred in Australia, particularly where Australian customers were directly involved in making decisions about the choice of airline. The Court affirmed the primary judge's findings that the market was route-specific for the supply of air cargo services from individual origin ports to individual destination ports in Australia, and that the participants included airlines, freight forwarders, and significant shippers. The Court rejected the argument that the place of contract execution determined the market's location, finding it to be fortuitous in international commerce. The Court also found no inconsistency between the *Air Navigation Act* and the *Trade Practices Act*, and no compulsion by foreign law.

Consequently, the appeals were dismissed with costs.