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The Case Against ‘French J’s Arsonist’

 |  February 10, 2016

Posted by Social Science Research Network

The Case Against ‘French J’s Arsonist’

Katharine Kemp (University of New South Wales)

Abstract:     It is a distinctive requirement of the Australian prohibition of misuse of market power that a firm must ‘take advantage’ of its substantial market power before it can be found to infringe s 46(1) of the Competition and Consumer Act 2010 (Cth). This element has been explained in the case law as requiring a causal link between the firm’s market power and its conduct. A commonly-cited illustration is that provided by French J in the Natwest case, where he commented that a dominant firm would not misuse its market power if it hired an arsonist to burn down its rival’s factory. This article argues that ‘French J’s arsonist’ would in fact contravene s 46(1). It is submitted that the dominant firm’s act of arson is an example of ‘plain exclusion’, a key concern of competition law, which should fall squarely within the scope of this prohibition.