Telstra deals ACCC final blow in competition fight

12 December 2007 04:34 PM

Tags: telstra, optus, federal court, competition, accc, notice

A legal battle between the ACCC and Telstra has concluded today, following a Federal Court ruling that a 2006 competition notice served by the watchdog is illegal.

The ACCC had appealed to the court to have the notice -- which allowed rivals to take legal action against Telstra -- rewritten, to ensure its legality.

Following the ruling, Telstra labelled the 18-month legal wrangle "a waste of time and money" and called for the ACCC's powers to be amended.

Telstra group counsel Will Irving said in a statement: "Despite the ACCC trying to torture the law to save face, the Court has ruled the ACCC has not met the legal requirements of procedural fairness and confirmed it does have an obligation to afford procedural fairness in the exercise of its powers, and that the court will not fix the ACCC's mistakes."

The ACCC served the competition notice in April 2006 after it alleged a price increase resulted in Telstra's retail prices for the line rental component -- for the majority of its fixed voice products -- being below its wholesale price for line rental.

Although the ACCC revoked the notice in March 2007, Telstra had already begun a course of legal action, which culminated in a legal victory for Telstra when the Federal Court declared the competition notice illegal.

Today's Federal Court decision rejected an appeal by the ACCC to have the court rewrite the notice to make it legal, Telstra said.

"As we said in April, the ACCC's powers should be overhauled given the finding of the Court that the ACCC had not treated Telstra fairly. The ACCC's competition notice exposed Telstra to potential fines of up to $3 million a day, as well as third-party litigation of precisely the type we saw from Optus," Telstra's Irving added.

Optus launched legal action against Telstra in May 2006, seeking damages as a result of the competition notice, although the suit was later dismissed.

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Talkback 13 comments

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Tel$tra spent squillions,..So what! Keith Styles -- 12/12/07

They achieved very little.
Will their shareholders benefit from more profits,..doubtful!

The infrastructure is for all to use & share equally, not just for Telstra to screw most of the Australian users.

Now the Government has a reason to give the ACCC the full power it needs to keep the monopoly under control.

Go get em,..Senator.....
1. A little sore are we Fair Go For Telstra -- 12/12/07
  
  You often praise the ACCC when they attack Telstra, this time you sound a little upset that finally all the ACCC's political play is starting to unravel.
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2. A little sore are we - Fair Go For Telstra -- 12/12/07 Rex Alfie Lee -- 17/12/07
  
  Whether the ACCC is a complete bunch of no-hopers or not, the truth is that Telstra is a bully that abuses its monopoly position & needs to be either mandated against or punished financially to an extent that they begin to fulfil the obligations that came with becoming a private business.
  
  1/ Provide an equitable service to all Australians
  
  2/ Provide an equitable service to all it competitors
  
  Split Telstra Now!
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Re: Telstra spent squillions (rewritten to ensure legality???) SJT -- 13/12/07

Keith demonstrates a predictable, 'who cares it's only Telstra' attitude, prevalent throughout these blogs! Unfortunately because of this bias and an unwillingness to comprehend the actual issue/facts with an open mind, he has, and many others with a similar mindset to Keith may also, miss the underlying and rather worrying issue altogether! I.e. an attempt by a governmental body to circumvent and/or alter the law. Thing is, whether we love or loathe Telstra - it may have been that terrible ogre Hel$tra this time, but who will be next? - surely it is of concern to all companies/citizens when a governmental referee issues a notice, but when the notice is found to be illegal, then asks for it to be 're-written to make it legal and subsequently enforceable'! What the ACCC is saying is, ok Telstra, you didn't actually do anything wrong, but because you have the hide to question us, we'll now attempt to move the goal posts to incriminate you 'after the fact'. Unbelievable! Sounds a bit like the Ford TV commercial with Hayden, Hussey, Clarke and Symonds - Whose rules? 'Our rules'!
High Court will rule. Sydney Lawrence -- 13/12/07

Wait for the result of the Telstra challenge in the High Court of Australia. That could really put the cat amongst the pigeons.
A fair go for everyone Telstra Share Holder -- 13/12/07

I think Keith may have forgotten that Telstra is now a private company and entitled to protect it's shareholders rights just like any other. The majority of us wanted this otherwise we wouldn't have voted for the previous coalition. We cannot have it both ways. When Telstra was Government owned and had a monopoly on all of it's services then it was fair game, but now that this is no longer the case we have to expect them to protect their shareholders rights and we also have to afford them the same fairness and opportunities as any other public company. The ACCC have done a good job (IMHO) in regulating this space in the past, but I am disgusted that they would try to abuse their powers by jumping into bed with a companies competitors to bring a frivolous competition notice (they withdrew it themselves) knowing full well that the serving of that notice would allow the companies competitors to launch their own legal action. For them to then turn around and expect the Federal Court to amend their stuff up to give it some legality is reprehensible.

Yes, I am a Telstra shareholder!
1. A fair go with restrictions Anonymous -- 13/12/07
  
  Unfortunately the sale of Telstra was accompanied by restrictions, and a clear understanding that Telstra was going to have to wholesale certain products.
  
  And remember that what you are reading regarding the "rewrite the law for them" quote; is from Telstra. I imagine the ACCC asked the court to point out the specific points of error in the original notice. *NOT* to re-write it; but so that they knew *why* it wasn't a legal competition notice.
  
  Don't get conned by the PR spin that Telstra have placed on this.
  
  Without spin; ACCC put an illegal notice upon Telstra, opening it up to legal action by others.
  The court ruled it was illegal.
  The ACCC probably (have to add this is conjecture, as no one has actually given any facts on this) appealed asking for the *reasons* it was ruled to be illegal so they could modify it to *be* legal. And for whatever reason the court denied this.
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2. Re. a fair go with restrictions SJT -- 13/12/07
  
  On the contrary anon, imho it is you making assumptions, to simply justify putting forward another typical anti-Telstra angle. 'Don't get conned by the PR spin Telstra have placed on this' , you say? There is clearly no justification whatsoever for suggesting this, other than personal bias! Just because 'you' believe it is spin, doesn't mean it actually is!
  
  FYI - the info 'rewritten to ensure it's legality', commented upon previously by myself , was not sourced from Telstra's so called spin department, but from ZDNet's Jo Best! It clearly says *rewritten*, not asked *why* (see second paraghrph above!). It is these actual comments, not your vague interpretation thereof, which I have made comment and replied to.
  
  Imho you are correct with your comments: - ACCC put an illegal notice upon Telstra, opening it up to legal action by others. And...
  The court ruled it was illegal. Simple...
  
  But from my recollection this action goes back to a ruling in April (also check the links above!) whereby Justice Annabelle Bennett initially ruled the ACCC had acted illegally and not treated Telstra fairly. As such, the ACCC have had 8 months to ascertain the *reasons* and to alter it's notices dodgy *legality*, if possible? As they were clearly unable to do so, the notice wasn't quashed for (as you say) 'whatever reasons' - it was quashed because it was initially, has since been and is still *illegal* - period!
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3. "Protect it's shareholders rights"?????? Ferris -- 14/12/07
  
  I thinks it's quite obvious that Telstra doesn't give a rats about shareholders, as they proved in the recent shareholders meeting when they took no notice whatsoever in relation to the Directors & the CEO's remuneration. They clearly think they are a law unto themselves.
  
  It's time for a level playing field for all and this monopoly to be broken up.
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4. A fair go for everyone Rex Alfie Lee -- 17/12/07
  
  There is truth in what you say Mr Telstra Shareholder but the fact that you are shareholder gives you zero credibility.
  
  Telstra became a private Co on the basis that it provided a service to everyone in Australia, not just the large majority. Telstra have never honoured that & since Ziggy Switkowsky, up to & including Sol (sun-shines-from-his-pants) Trujillo, Telstra have basically avoided doing the one thing they are supposed to do. You can scream for them all you like & what the ACCC is doing shows them to be fools as well but that doesn't put Telstra in the clear.
  
  The service provided by your crap company is pathetic, monopolising & destructive from a once wonderful company that I worked for.
  
  Trujillo decimated 2 telecommunications companies in the past in the US. Why are you defending this company? Doesn't that alone tell you something is wrong?
  
  A company is partly placed in a position of importance bcoz of the service it provides but everyone complains. Surely that is proof enough.
  
  If you didn't have shares in this company you would just be complaining the same as the rest of us. If you can't see that POV then perhaps you need to return to school & have some lessons in communication.
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5. Credibility? Arnold -- 03/03/08
  
  Rex Alfie Lee, the fact that you are a jaded ex-Telstra employee gives you zero credibility.
  
  Don't worry about anyone else mate, your just as biased as the rest of the twits on these forums.
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6. Credibility? Arnold -- 04/03/08
  
  Hahaha disregard that, I suck cocks
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Corruption is the norm Anonymous -- 14/12/07

http://erijustice.atspace.com/index.html

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Telstra deals ACCC final blow in competition fight

Talkback 13 comments

Tel$tra spent squillions,..So what! Keith Styles -- 12/12/07

A little sore are we Fair Go For Telstra -- 12/12/07

A little sore are we - Fair Go For Telstra -- 12/12/07 Rex Alfie Lee -- 17/12/07

Re: Telstra spent squillions (rewritten to ensure legality???) SJT -- 13/12/07

High Court will rule. Sydney Lawrence -- 13/12/07

A fair go for everyone Telstra Share Holder -- 13/12/07

A fair go with restrictions Anonymous -- 13/12/07

Re. a fair go with restrictions SJT -- 13/12/07

"Protect it's shareholders rights"?????? Ferris -- 14/12/07

A fair go for everyone Rex Alfie Lee -- 17/12/07

Credibility? Arnold -- 03/03/08

Credibility? Arnold -- 04/03/08