Australian Competition and Consumer Commission v Boral Ltd

The Australian Competition and Consumer Commission (ACCC) brought an action against Boral Ltd, specifically its subsidiary BBM, in relation to alleged anti-competitive behaviour in the concrete masonry products market. The dispute centred on whether BBM had engaged in price undercutting below its variable costs, in violation of the Trade Practices Act. The Federal Court was tasked with determining the legal issues arising from the ACCC's claims.

The primary legal issues revolved around the interpretation of the Trade Practices Act and whether BBM's pricing strategies constituted price undercutting below variable costs. The court needed to assess whether BBM’s pricing policies, which often saw prices set below variable costs, violated the Act. Additionally, the court had to determine the relevant market for concrete masonry products to assess the competitive dynamics and substitutability of products within that market.

The court found that while BBM’s prices were below variable costs for significant periods, there was no evidence to suggest that BBM management was aware or believed their pricing practices contravened the Trade Practices Act. The analysis of the market showed that concrete masonry products constituted a competitive market with potential for substitution between products and suppliers. The court concluded that BBM’s pricing strategies, while sometimes below variable costs, did not amount to a breach of the Act. Therefore, the application by the ACCC was dismissed.

The court adjourned the question of costs to a later date, pending further determination.