East Australian Pipline Ltd v Australian Competition and Consumer Commission & Anor

The dispute in *East Australian Pipeline Ltd v Australian Competition and Consumer Commission & Anor* concerned the application of Part XIB of the *Trade Practices Act 1974* (Cth) (now the *Competition and Consumer Act 2010* (Cth)) to the supply of natural gas by East Australian Pipeline Ltd (EAP) to the Australian Gas Light Company (AGL). The High Court of Australia was asked to determine whether EAP's conduct in supplying gas to AGL constituted a "misuse of market power" under section 46 of the Act.

The central legal issue before the High Court was whether EAP had taken advantage of its substantial degree of market power in the wholesale natural gas market in New South Wales for the purpose of engaging in conduct that had the purpose, effect, or likely effect of substantially lessening competition. Specifically, the court had to consider whether EAP's pricing and supply arrangements with AGL were indicative of such a misuse of market power, and whether the relevant market was correctly defined for the purposes of the section.

The High Court's reasoning focused on the definition of the relevant market and the nature of EAP's conduct. The court affirmed that the definition of the market is a crucial first step in assessing a contravention of section 46. It found that EAP did not possess a substantial degree of market power in the relevant market, which was defined as the wholesale market for the supply of natural gas in New South Wales. The court concluded that EAP's conduct, including its pricing, did not demonstrate a misuse of market power as contemplated by section 46, as it did not have the purpose or effect of substantially lessening competition. The appeal was dismissed.