In July 2017, Aurizon and Pacific National entered into a number of agreements for the sale and purchase (or subcontract) of Aurizon’s Acacia Ridge Terminal, its interstate intermodal business and its Queensland intermodal business. The ACCC alleged that in doing so Aurizon and Pacific National reached an understanding that had (or Pacific National’s proposed acquisition of the Acacia Ridge Terminal would have) the effect or likely effect of substantially lessening competition.
Justice Beach of the Federal Court found that the ACCC failed in its case in relation to the subcontract as:
- it was unlikely that Pacific National would have the ability to discriminate against a new entrant or that barriers to entry would be raised, given Aurizon’s ongoing presence under the terms of the agreements; and
- the ACCC’s alternative argument that the sales process would have continued with another participant acquiring the assets (and therefore that barriers to entry would not be raised) did not properly assess the likely impact on competition and involved an ‘impermissible causation analysis’
Justice Beach found that the proposed acquisition would have the effect of substantially lessening competition if Pacific National had not offered an unconditional undertaking on the last day of the hearing.
Read the full briefing here.