Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Australian Competition and Consumer Commission price fixing claims against ANZ Bank dismissed, (Nov 19, 2013)
Organizations Mentioned:Australian and New Zealand Banking Group Limited
The Australian Federal Court has dismissed proceedings brought by the Australian Competition and Consumer Commission (ACCC) against Australian and New Zealand Banking Group Limited (ANZ Bank) alleging a breach of the price fixing provisions of the Trade Practices Act 1974 (the Act), now the Competition and Consumer Act 2010 (CCA), the ACCC announced yesterday.
The ACCC instituted proceedings against the ANZ Bank in 2007 in Brisbane Federal Court. The ACCC alleged that in 2004 the ANZ Bank sought to limit the amount of a refund a mortgage broker, Mortgage Refunds Pty Ltd., could provide to its customers in arranging ANZ home loans in violation of Section 45 of the Act, which prohibits price fixing agreements.
The ACCC alleged that ANZ Bank made an agreement where it would only allow Mortgage Refunds to continue to be accredited to offer ANZ Bank mortgage products if it agreed to limit any refund it paid to its customers to $600, which would allow ANZ branches to match the deal if they chose to waive the ANZ loan establishment fee. This amounted to price fixing, according to the Commission, because ANZ Bank and Mortgage Refunds were competitors in the market for the provision of loan arrangement services.
The court found that ANZ Bank did not participate in a market for the provision of loan arrangement services and consequently ANZ Bank and Mortgage Refunds were not competitors in the market. As a result, ANZ Bank’s conduct did not amount to a price fixing agreement.
ACCC Chairman, Rod Sims, said “Anti-competitive agreements between competitors are a priority for the ACCC because when businesses seek to fix, control or maintain the prices, rebates or discounts offered by their competitors, this can prevent or hinder competition, forcing up prices and reducing choices for consumers. In this case, the ACCC was concerned that the conduct affected price competition, which would ultimately impact upon consumers.”
“It was especially significant that this conduct took place in the market for mortgage arrangement services, as home loans are a major cost for many people,” Sims said. The court’s judgment was extensive and will be given careful consideration by the ACCC.
Companies: Australian and New Zealand Banking Group Limited
News: Antitrust