Melway Publishing Pty Ltd v Robert Hicks Pty Ltd

The case of *Melway Publishing Pty Ltd v Robert Hicks Pty Ltd* involved an appeal to the High Court of Australia concerning allegations of misuse of market power under the Trade Practices Act 1974 (Cth). The appellant, Melway Publishing Pty Ltd, a manufacturer and distributor of street directories, had appointed an exclusive distributor for a sector of the retail market and refused to supply another potential distributor, Robert Hicks Pty Ltd. The respondent alleged that Melway had taken advantage of its substantial market power for the purpose of deterring or preventing Robert Hicks from engaging in competitive conduct.

The central legal issue before the High Court was whether Melway's conduct constituted a misuse of market power under section 46 of the Trade Practices Act. Specifically, the court had to determine if Melway had taken advantage of its "substantial degree of market power" in the market for street directories in Melbourne, and if so, whether its purpose in doing so was to prevent or hinder Robert Hicks from engaging in competitive conduct in that market. This required an examination of the meaning of "take advantage of" in the context of section 46 and its application to the facts of the case, particularly in light of previous High Court authority in *Queensland Wire Industries Pty Ltd v Broken Hill Pty Co Ltd*.

The High Court, in a majority decision, allowed the appeal. The reasoning focused on the interpretation of "take advantage of" within section 46. The majority held that to "take advantage of" market power, the conduct must be engaged in because of, and by reason of, the possession of that power. It was not sufficient that the power was merely used in the course of the conduct. The court found that Melway's refusal to supply was not predicated on its market power but rather on its contractual arrangements and business strategy. The court emphasised that the purpose of section 46 was to prevent the misuse of market power to harm competition, not to penalise a business for acting in its own commercial interests, even if it possessed significant market power.

Consequently, the High Court allowed the appeal, set aside the orders of the Full Court of the Federal Court of Australia, and ordered that the respondent's application be dismissed. The respondent was ordered to pay the appellant's costs at first instance and in the Full Court.