Australian Competition and Consumer Commission v Cabcharge Australia Ltd

The Australian Competition and Consumer Commission (ACCC) brought an action against Cabcharge Australia Ltd (Cabcharge), a company that provides payment processing systems and services to taxi drivers, owners, and networks, in relation to alleged breaches of section 46 of the Trade Practices Act 1974 (Cth). The ACCC alleged that Cabcharge abused its market power by refusing to deal with certain firms and engaging in predatory pricing between 2004 and 2008. These allegations were partially admitted by Cabcharge, leading to the ACCC seeking declarations of contravention, pecuniary penalties, a probation order, and a contribution to costs.

The central legal issues the court had to address were whether Cabcharge had indeed abused its market power and, if so, what the appropriate penalties and orders should be. The court needed to determine if Cabcharge's conduct, which included refusing to deal with competitors and engaging in predatory pricing, constituted an abuse of its dominant position in the relevant market. Additionally, the court had to decide on the appropriate penalties and whether a probation order requiring Cabcharge to establish a compliance program was warranted.

The court found that Cabcharge had indeed abused its market power in the processing market for taxi payments. By refusing to deal with certain firms and engaging in predatory pricing, Cabcharge had acted to affect the profitability of its competitors, ensured it remained price-competitive, and prevented new entrants from supplying electronic processing services. The court acknowledged that Cabcharge's substantial market power allowed it to engage in such conduct, which would not have been possible if it faced competition. The court then determined the appropriate penalties and orders based on the principles of specific and general deterrence. It imposed pecuniary penalties of $2 million for the refusal to deal with Travel Tab, $9 million for the refusal to deal with MPos, and $3 million for predatory pricing. The court also ordered Cabcharge to establish a Trade Practices Compliance and Education/Training Program to prevent future contraventions. Lastly, Cabcharge was required to contribute $1 million to the ACCC’s costs.