Stillwater Pastoral Company Pty Ltd v Stanwell Corporation Ltd

Stillwater Pastoral Company Pty Ltd brought an action against Stanwell Corporation Ltd and CS Energy, alleging misuse of market power in the National Electricity Market (NEM). The case centred on whether the respondents had substantial market power and used it to manipulate electricity prices. The Federal Court was tasked with determining several key issues, including the definition of the relevant market, the degree of market power held by the respondents, and whether their actions constituted a misuse of that power.

The court addressed the definition of the relevant market for assessing market power under section 46 of the Competition and Consumer Act 2010 (Cth) (CCA). It considered whether the relevant market extended beyond the Queensland region of the NEM. Additionally, the court examined whether Stanwell and CS Energy, either individually or collectively, held a substantial degree of market power within the meaning of section 46 of the CCA. This involved evaluating competing economic approaches to assess market power and understanding the constraints within the NEM on substantial market power.

Further, the court assessed whether the respondents engaged in short-notice rebidding, a strategy intended to deter or prevent other market participants from engaging in competitive conduct. Stillwater relied on thirteen examples of alleged short-notice rebidding to support its case. The court examined whether the respondents had engaged in such rebidding and whether the alleged purpose of deterring competitive conduct was established on the evidence.

The court also considered the implications of the respondents being government-owned corporations under the Government Owned Corporations Act 1993 (Qld) (GOCA), including whether they were related within the meaning of section 4A of the CCA and whether the State of Queensland was a "company" under section 4A(4) of the CCA. Additionally, it assessed whether the GOCA conferred on the shareholding ministers or the State of Queensland control of the respondents, making them emanations of the Crown.

The court ruled that the relevant market for the purposes of section 46 of the CCA was as pleaded in the Statement of Claim. It found that neither Stanwell nor CS Energy held a substantial degree of power in the market individually or collectively during the conduct period. The court also concluded that neither respondent engaged in short-notice rebidding in any of the alleged instances. As a result, the court found that the respondents did not take advantage of their market power or engage in conduct intended to deter or prevent competitive conduct. Consequently, the proceeding was dismissed, and the matter was adjourned to March 2025 for the determination of costs.