The ACCC has granted unconditional merger authorisation to Gumtree’s proposed acquisition of Cox Australia Media Solutions (Cox Media), allowing Gumtree Cars to be combined with Cox Media’s Carsguide and Autotrader sites.

“We authorised this merger because we concluded it was not likely to lead to a substantial lessening of competition, including in the supply of online automotive classifieds in Australia. Therefore it was not necessary to consider the public benefit limb of the authorisation test,” ACCC Chair Rod Sims said.

Carsales is the leading provider of online automotive classified advertising in Australia and is a significant competitive constraint on Gumtree and Cox Media. Facebook Marketplace is also a growing competitor to Gumtree and Cox Media in the supply of online automotive classifieds services.

“Our investigation showed that Carsales and Facebook Marketplace are likely to continue to provide significant competition in online automotive classifieds after Gumtree acquires Cox Media,” Mr Sims said.

“We also found that Gumtree and Cox Media focus on different segments, with Gumtree focussing on private seller listings and Cox Media focussing on dealer listings.”

The ACCC also investigated the impact of the acquisition on the supply of online display advertising on digital automotive content providers.

The ACCC was satisfied that the acquisition is unlikely to result in a reduction of competition for supplying online display advertising to advertisers wishing to target potential car buyers.

“Many advertisers use third parties to place targeted advertisements to individual consumers based on browsing history data on a wide range of websites. Further, we found there are a range of other digital automotive content providers where direct advertisers could place automotive-related advertising, including Drive, Carsales, GoAuto and digital versions of automotive print publications,” Mr Sims said.

The ACCC’s determination is available at Gumtree AU Pty Ltd proposed acquisition of Cox Australia Media Solutions Pty Ltd.

Background

Gumtree’s application is the second merger authorisation application following reforms in 2017 to the merger authorisation process, which reinstated the ACCC’s ability to consider applications for merger authorisation. Previously authorisation applications were made directly to the Australian Competition Tribunal.

Merger authorisation provides an alternative avenue for merger clearance to the informal merger review process, which is the most commonly used avenue used by merger parties. The authorisation process is public. If merger authorisation is granted, merger parties are exempt from the merger laws.

The ACCC may grant authorisation for a proposed merger if it is satisfied the merger is not likely to substantially lessen competition, or where the likely public benefits outweigh the likely public detriments.

Gumtree sought merger authorisation for its proposed acquisition of Cox Media. Gumtree (through Gumtree Cars) and Cox Media (through Carsguide/Autotrader) both offer online automotive classified advertising to private and dealer sellers in Australia. Gumtree and Cox both sell third parties display advertising space on their websites and mobile applications.

Gumtree is a subsidiary of eBay Classifieds Holding BV, whose ultimate parent company is eBay Inc. eBay operates a multi-category general classifieds website in Australia.

Cox Media is a subsidiary of Cox Automotive, which is 70 per cent owned by Cox Automotive International Sarl and 30 per cent owned by DealerMotive Ltd, a consortium of Australian dealer groups. Carsguide and Autotrader provide automotive editorial content and automotive classifieds.

The ACCC has welcomed the announcement that Flight Centre will stop charging customers hundreds of dollars in cancellation fees in order to get a refund for travel cancelled due to the COVID-19 pandemic.

Flight Centre will refund thousands of customers who, from 13 March, were charged $300 per person to get a refund for a cancelled international flight or $50 for a domestic flight.

This policy will also apply to cancellations fees charged by Aunt Betty, Travel Associates, Student Universe, Universal Traveller and Jetescape Travel (trading as Byojet Travel), which are part of the Flight Centre group.

Flight Centre’s decision follows weeks of pressure from the ACCC for Flight Centre to improve its treatment of customers during COVID-19 travel restrictions.  

The ACCC said its next step would have been court action if Flight Centre did not change its position. This announcement will provide faster relief for consumers than would have been likely to have resulted from any court action. 

The ACCC has received a large number of complaints about Flight Centre’s cancellation fees from consumers via its Infocentre, website, and social media channels.

“This is a very welcome move made by Flight Centre for thousands of customers impacted by COVID-19 travel cancellations,” ACCC Chair Rod Sims said.

“We are continuing to discuss issues in relation to refunds and cancellations with the travel sector, and encourage travel providers to treat consumers fairly in these exceptional circumstances.” 

“While we know some consumers are very concerned about getting a refund or credit for their cancelled travel plans, we do ask people to be mindful of the significant impact that this pandemic has had on the travel industry.” 

The ACCC has received more than 6000 complaints from consumers dissatisfied with travel companies’ refund policies and cancellation fees, with thousands more contacting their local state or territory fair trading agencies seeking assistance resolving individual disputes. 

While a consumer’s right to a refund during this period will depend on the terms and conditions of the contract entered into with travel provider, the ACCC says many businesses are struggling to process the high number of cancellations.

“We ask consumers to remain patient and be mindful of the significant pressures on businesses at this time and, where possible, contact the business by email or website, rather than by phone,” Mr Sims said.

“These are very complex issues and may take smaller businesses more time to respond.”

For more information on consumer rights and obligations of businesses during COVID-19 please visit accc.gov.au

The Full Court of the Federal Court has today delivered its judgment on the ACCC’s appeal in relation to proceedings brought to stop Pacific National’s acquisition of the Acacia Ridge Terminal in Brisbane by Aurizon (ASX: AZJ).

The ACCC had appealed the 2019 judgment of the Federal Court which held that the acquisition would not be likely to substantially lessen competition due to an undertaking that Pacific National had offered the Court.

While the ACCC was successful in relation to a number of legal issues, the Full Court found there was insufficient evidence to establish that the acquisition was likely to result in a substantial lessening of competition, and dismissed the ACCC’s appeal.

Although the majority of the Full Court agreed with the ACCC’s position on the meaning of ‘likely’, the case hinged on the ACCC establishing the likelihood of another player seeking to enter the market in the next five to ten years. The Full Court considered that the prospect of new entry was no more than speculative.

“This was a particularly important case for Australia’s merger laws, and the outcome demonstrates the real difficulty of applying the substantial lessening of competition provisions in the legislation,” ACCC Chair Rod Sims said.

The result of the Full Court’s decision is that Pacific National’s acquisition of the Acacia Ridge Terminal may proceed, without the access undertaking accepted by the trial judge.

“This is also a sad day for the economy, because the ACCC’s view is that the prospects of competition in rail freight have been significantly diminished and the impacts of this will be with us for more than a decade,” Mr Sims said.

The ACCC’s case was that Pacific National’s ownership of the Acacia Ridge Terminal would allow it to effectively prevent access to new entrants, entrenching Pacific National’s position as the dominant rail freight carrier on the east coast.

“We will now carefully consider the Full Court’s judgment. The ACCC will continue to consider what changes are needed to make Australia’s merger laws work in the way they need to, to safeguard the economy from highly concentrated markets,” Mr Sims said.

Notes to editors

The term ‘intermodal’ freight is used to describe the carriage of general freight usually in a container using two or more modes of transportation, such as truck and rail. ‘Intermodal rail linehaul’ refers to the rail leg of the movement of intermodal freight. ‘Steel rail linehaul’ refers to similar services that are provided in respect of steel products.

An intermodal terminal, such as the Acacia Ridge Terminal, comprises infrastructure with a connection to a rail line where containers can be transferred between transportation modes.

Background

The ACCC commenced proceedings on 18 July 2018 alleging that Pacific National’s acquisition of the Acacia Ridge Terminal from Aurizon would have the likely effect of substantially lessening competition in breach of section 50 of the Competition and Consumer Act 2010.

The ACCC was concerned that the acquisition of the Acacia Ridge Terminal would deter a new entrant from providing interstate linehaul services in competition with Pacific National.

The ACCC had commenced a public investigation of Aurizon’s proposed exit plans, including the proposed acquisitions by Pacific National of the Acacia Ridge Terminal and Queensland intermodal business on 27 October 2017. The ACCC issued a statement of issues on 15 March 2018.

The Federal Court dismissed the ACCC’s proceedings on 15 May 2019. The trial judge found that, with Pacific National’s undertaking offered to the Court, the acquisition of the Acacia Ridge Terminal would not be likely to substantially lessen competition.

The ACCC lodged an appeal on 27 June 2019. The appeal, and cross appeals by Pacific National and Aurizon, were heard before the Full Court of the Federal Court from 17 – 20 February 2020.

The ACCC has revoked an interim authorisation due to the change in market conditions caused by the COVID-19 pandemic. The ACCC granted the interim authorisation in February to five major car rental companies to jointly negotiate with Cairns Airport including discussions about their lease agreement for space, such as parking bays and counter space at the airport.

The rental companies, Avis, Budget, Hertz, Europcar, and Thrifty, had lodged their application for authorisation in late 2019, but since then, the COVID-19 pandemic has severely impacted the economy’s travel and car rental sectors.

The ACCC decided to revoke the interim authorisation after a request by the car rental companies that the ACCC delay its decision about the substantive application. This request has been granted.

The companies also indicated they would voluntary suspend collective negotiations, permitted under the interim authorisation, during the delay in considering the application.

“As the companies are not proposing to engage in the authorised conduct in the current circumstances, the interim authorisation is clearly no longer needed and it is appropriate we revoke it,” ACCC Commissioner Stephen Ridgeway said.

“Any authorisation, including interim authorisations, should only be in place for as long as they are needed.”

“The car rental companies have indicated they have no current need to be allowed to engage in the conduct, which, without authorisation, could be in breach of competition laws,” Mr Ridgeway said.

“We are closely monitoring when to revoke any interim authorisations, including those granted because of the COVID-19 pandemic, and we expect them to cease when they are no longer appropriate. We also expect authorised parties to keep the ACCC updated of any relevant changes that impact their authorisation.”

The substantive application involved a request for the five car rental companies to collectively negotiate all terms and conditions (both price and non-price) related to the acquisition of airport space and services from Cairns Airport under licence and lease agreements, including a turnover percentage, car parking fees, rental payment and concessions.

The interim authorisation did not extend to entering into collectively negotiated agreements.

“Irrespective of ACCC monitoring in place of the arrangements, allowing the interim authorisation to continue during this period could involve some risk of adverse effects to the interest of Cairns Airport, during the extended review timetable for this matter. The car rental companies can easily and quickly re-apply for interim authorisation at any stage if it becomes necessary,” Mr Ridgeway said.

The ACCC extended the timetable to make a final decision on the application for authorisation by six months. It will seek feedback from interested parties at a later stage.

More information, including the ACCC’s revocation authorisation decision, is available at Car rental operators at Cairns Airport.

Background

On 28 November 2019, the ACCC received an application by six car rental companies seeking authorisation for 10 years in relation to negotiations for space, including counter space, car parking bays and shared facilities, at Cairns Airport. The ACCC conducted public consultations.

On 13 February 2020 the ACCC granted interim authorisation to WTH Pty Ltd trading as Avis Australia, Budget Rent a Car Australia Pty Ltd, Hertz Australia Pty Limited, CLA Trading Pty Ltd trading as Europcar, and Kingmill Pty Ltd trading as Thrifty Car Rental and Dollar Car Rental to prepare for negotiations, and negotiate with Cairns Airport Pty Ltd.

A sixth rental company, Redspot Head Office Pty Ltd (trading as Enterprise, Alamo, National and Redspot), withdrew its request for authorisation on 28 April.

On 26 March 2020, the ACCC issued a draft determination proposing to grant authorisation for five years and sought submissions from interested parties.

Notes to editors

ACCC authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010.

Section 91 of the Act allows the ACCC to grant interim authorisation when it considers it is appropriate. This allows the parties to engage in the proposed conduct while the ACCC is considering the merits of the substantive application.

The ACCC may review a decision on interim authorisation at any time, including in response to feedback raised following interim authorisation.

Broadly, the ACCC may grant a final authorisation when it is satisfied that the likely public benefit from the conduct outweighs any likely public detriment.