Telstra not anti-competitive says Federal Court

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Telstra not anti-competitive says Federal Court

The Federal Court has decreed that the Australian Competition and Consumer Commission (ACCC) was not entitled to issue a Part A Competition Notice against Telstra in December 2005.

The ‘Competition Notice’ alleged that Telstra had acted anti-competitively by raising the wholesale price of its Home Access line rental service.

On 5 April 2007, Justice Bennett found that the Competition Notice differed from the Consultation Notice in respect of two matters held to be of substance. She found that, as Telstra was not given details of those matters when the ACCC consulted with it, Telstra was not afforded procedural fairness.

According to ACCC chairman Graeme Samuel, it sought to uphold the majority of the Competition Notice to preserve the ability of affected third parties to seek damages against Telstra based on those parts in the period before the ACCC implemented a solution through direct regulation.

"While the ACCC of course accepts the findings of the Federal Court, the decision does highlight substantial procedural difficulties for the ACCC in the competition notice regime and in quickly addressing competition concerns in the telecommunications industry," he said.

In making final orders today, the court found that severance was not appropriate and therefore quashed the Competition Notice.

According to Samuel the ACCC is concerned that the decision may encourage the recipient of a notice to challenge procedural aspects instead of addressing the substantive underlying conduct.

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