Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd

The case of Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd involved the Australian Competition and Consumer Commission (ACCC) bringing an action against Baxter Healthcare Pty Ltd, an Australian subsidiary of a global medical products company. The dispute centered on Baxter’s tendering practices for the supply of sterile fluids to public hospitals and other facilities funded by the States and Territories, and the ACCC alleged that Baxter’s conduct contravened section 47 of the Competition and Consumer Act 2010 (Cth). The case was initially heard in the Federal Court of Australia and subsequently appealed to the Full Court and ultimately to the High Court.

The primary legal issues before the court were whether the conduct of Baxter, specifically its tendering practices and the agreements entered into with state purchasing agencies (SPAs), contravened section 47 of the Act, which prohibits exclusive dealing arrangements that have, or are likely to have, the effect of substantially lessening competition. The court was also required to determine whether the states and the ACT had immunity from the Act when negotiating and entering into these agreements, and if such immunity could be extended to Baxter as the counterparty to these agreements.

The High Court, in reversing the decision of the Full Court, found that the states and the ACT were not carrying on a business when negotiating and entering into the impugned agreements, thus they were entitled to Crown immunity. However, the High Court did not consider whether the Act applied to Baxter’s conduct. Instead, the court remitted the matter to the Full Court to consider the other issues raised, including the applicability of the Act to Baxter’s conduct and whether Baxter was entitled to derivative Crown immunity.

The Full Court will now need to determine whether Baxter’s conduct contravened section 46 of the Act, which prohibits the making of agreements that cause a substantial lessening of competition, and if so, whether Baxter is subject to the Act despite the immunity of the states and the ACT. The court will also need to consider the specific allegations regarding Baxter’s tendering practices and agreements with the SPAs.