Queensland Wire Industries Pty Ltd v The Broken Hill Proprietary Company Limited

Queensland Wire Industries Pty Ltd (the applicant) brought an action in the Federal Court against The Broken Hill Proprietary Company Limited and Australian Wire Industries Pty Ltd (the respondents). The applicant sought damages and injunctive relief, alleging that the respondents had contravened section 46 of the *Trade Practices Act* by refusing to supply the applicant with a product known as "Y-Bar". The applicant used Y-Bar to manufacture steel star-picket posts, a component necessary to complete its range of rural fencing products. The applicant had previously sourced bulk wire from the respondents and had recently expanded into manufacturing its own bulk wire from wire rod supplied by the respondents.

The legal issues before the High Court concerned the interpretation and application of section 46 of the *Trade Practices Act*. Specifically, the court was required to determine whether the respondents' refusal to supply Y-Bar to the applicant constituted a contravention of section 46. This involved considering whether the respondents had taken advantage of a substantial degree of market power they possessed in the market for the supply of various finished and unfinished products. The trial judge had dismissed the applicant's claim on the basis that it had failed to prove this element of market power abuse, while the Full Court had dismissed the appeal on the ground that no relevant market for Y-Bar existed, rendering the question of market power moot.

The High Court considered whether a vertically integrated manufacturer and supplier with substantial market power could contravene section 46 by refusing to supply a product. The court ultimately found that the respondents had indeed contravened section 46. The reasoning focused on the fact that the respondents possessed a substantial degree of power in the market for steel products, including wire rod and Y-Bar. By refusing to supply Y-Bar to Queensland Wire Industries, a competitor in the downstream market for star-picket posts, the respondents were found to have taken advantage of that market power for the purpose of preventing Queensland Wire Industries from competing. The court held that the existence of a separate market for Y-Bar was not a prerequisite for a contravention of section 46; rather, the relevant market was that in which the respondents held substantial power and from which they refused to supply.