1) What is the relevant market?
To determine the boundaries the relevant market, the ACCC and Australian Courts apply the SSNIP test which determines the smallest product and geographical dimension over which a hypothetical monopolist could initiate ‘a small but significant and non-transitory increase in the price of its goods’ (ACCC v Metcash Trading).
Prima facie, the product dimension of the market in this scenario consisted of the amino acid lysine, which is commonly added as a nutritional supplement in poultry and swine feed. From the perspective of feed manufacturers, there is no viable substitute for factory synthesised Lysine. Lysine occurs naturally in plant matter, such as soy beans, but in very low concentrations that are not economically …show more content…
The first issue to consider would be whether the CCA applies to ADM. From an Australian perspective, ADM is a foreign corporation and would resultantly be subject to the CCA prohibitions (see s 4 definition of ‘corporation). Furthermore, the CCA would also apply if the same conduct had been undertaken by an Australian corporation, as that corporation would be considered a trading corporation (See Quickenden v O’Connor).
Having established that the CCA applies, the next issue is whether ADM’s conduct breaches the cartel conduct prohibitions in Pt IV of the CCA. The elements of the relevant prohibitions and their application to this scenario are outlined in my response to Q3.
In the movie, the FBI was shown to have a wide range of investigative powers, which enabled it to compile a large quantity of evidence against ADM. It is important to consider whether the ACCC in Australia could rely on similar techniques to develop its case and the extent of its investigative powers.
It is also important to consider how the informant, Mark Whitacre, would have been handled by Australian authorities. The ACCC and the CDPP have co-operation and immunity policies for individuals that provide information regarding cartel conduct. The application of these to ‘Mark Whitacre’ is outlined in the answer to question …show more content…
It is the substance of a provision, and not its form that is important. In this scenario, the alleged provision relates to fixing prices of lysine supplied by the parties to the purported agreement. This satisfies the purpose/effect condition by satisfying s 44ZZRD(2)(a) and s 44ZZRD(2)(c). The purpose condition in s 44ZZRD(3)(a)(i) is also established as the firms decided to restrict output, as a mechanism for achieving their price targets. The competition condition in s 44ZZRD(4) has been satisfied as ADM would have been in competition with the other manufacturers for both the supply [s44ZZRD(4)(c)] and production of Lysine [see s44ZZRD(4)(f)], but for the purported agreement between them.
Sections 44ZZRJ and 44ZRK create civil prohibitions for making and giving effect to a cartel provision. The requirement for a cartel provision has been satisfied, the only issue is whether the agreement between ADM and the other Lysine manufacturers would be considered a contract, arrangement or understanding. As per Gray J in Leahy, these terms represent a spectrum of consensual dealings with differing levels of
To determine the boundaries the relevant market, the ACCC and Australian Courts apply the SSNIP test which determines the smallest product and geographical dimension over which a hypothetical monopolist could initiate ‘a small but significant and non-transitory increase in the price of its goods’ (ACCC v Metcash Trading).
Prima facie, the product dimension of the market in this scenario consisted of the amino acid lysine, which is commonly added as a nutritional supplement in poultry and swine feed. From the perspective of feed manufacturers, there is no viable substitute for factory synthesised Lysine. Lysine occurs naturally in plant matter, such as soy beans, but in very low concentrations that are not economically …show more content…
The first issue to consider would be whether the CCA applies to ADM. From an Australian perspective, ADM is a foreign corporation and would resultantly be subject to the CCA prohibitions (see s 4 definition of ‘corporation). Furthermore, the CCA would also apply if the same conduct had been undertaken by an Australian corporation, as that corporation would be considered a trading corporation (See Quickenden v O’Connor).
Having established that the CCA applies, the next issue is whether ADM’s conduct breaches the cartel conduct prohibitions in Pt IV of the CCA. The elements of the relevant prohibitions and their application to this scenario are outlined in my response to Q3.
In the movie, the FBI was shown to have a wide range of investigative powers, which enabled it to compile a large quantity of evidence against ADM. It is important to consider whether the ACCC in Australia could rely on similar techniques to develop its case and the extent of its investigative powers.
It is also important to consider how the informant, Mark Whitacre, would have been handled by Australian authorities. The ACCC and the CDPP have co-operation and immunity policies for individuals that provide information regarding cartel conduct. The application of these to ‘Mark Whitacre’ is outlined in the answer to question …show more content…
It is the substance of a provision, and not its form that is important. In this scenario, the alleged provision relates to fixing prices of lysine supplied by the parties to the purported agreement. This satisfies the purpose/effect condition by satisfying s 44ZZRD(2)(a) and s 44ZZRD(2)(c). The purpose condition in s 44ZZRD(3)(a)(i) is also established as the firms decided to restrict output, as a mechanism for achieving their price targets. The competition condition in s 44ZZRD(4) has been satisfied as ADM would have been in competition with the other manufacturers for both the supply [s44ZZRD(4)(c)] and production of Lysine [see s44ZZRD(4)(f)], but for the purported agreement between them.
Sections 44ZZRJ and 44ZRK create civil prohibitions for making and giving effect to a cartel provision. The requirement for a cartel provision has been satisfied, the only issue is whether the agreement between ADM and the other Lysine manufacturers would be considered a contract, arrangement or understanding. As per Gray J in Leahy, these terms represent a spectrum of consensual dealings with differing levels of