Yazaki Corporation and Australian Arrow (in Liquidation) Pty Ltd v Australian Competition And Consumer Commission

Yazaki Corporation and Australian Arrow (in Liquidation) Pty Ltd (the applicants) sought judicial review of a decision by the Australian Competition and Consumer Commission (the respondent) to refuse to grant authorisations for certain conduct. The applicants sought to collectively bargain with vehicle manufacturers regarding the supply of automotive wiring harnesses and related products. The Full Federal Court was asked to determine whether the Commission's decision was affected by an error of law.

The primary legal issue before the Full Federal Court was whether the Commission had erred in its assessment of the likely public benefit and detriment arising from the proposed conduct, specifically in relation to the application of the competition limb of the public benefit test under section 90(7) of the *Trade Practices Act 1974* (Cth) (the Act). The applicants contended that the Commission had failed to properly consider the potential for competition between themselves and other suppliers, and had incorrectly applied the concept of market power.

The Court reasoned that the Commission’s assessment of the likely public benefit and detriment was flawed because it had failed to adequately consider the potential for competition between the applicants and other suppliers of automotive wiring harnesses. The Court found that the Commission had incorrectly applied the competition limb of the public benefit test by focusing too narrowly on the applicants' market power and not sufficiently on the broader competitive landscape. The Court emphasised that the public benefit test requires a holistic assessment of all relevant factors, including the potential for inter-brand competition.

The Full Federal Court set aside the Commission's decision and remitted the applications for authorisations back to the Commission for reconsideration according to law.