19/4/2008 - Points to consider when opposing Ebays Application for Exclusive trading
It's a thoughtful read... and it could be helpful when formulating a response to the ACCC - opposing Ebay's application to an exemption to S47 of the Trade Practices act.
(included in the write up with interpretations of the act)
http://www.powersellersunite.com/viewtopic.php?p=162285#162285
I do a fair amount of legalese... and while I can't say I'd love burn Ebay to the ground, ahem....
The art of getting even -
What I am doing, is going to read through Ebay's submission or application to the ACCC, perhaps several times (I have only had a glance at it)
Each time I am going to take notes.
Then I am going to read through the ACCC's response to this matter - again, perhaps several times.
Each time I am going to take notes.
I am also then going to read up on S47 of the Trade Practices Act.
I am also going read up on the interpretations of "Exclusive Trading" - and the grounds for it's illegality.
Then I am going to blende in the my argument, the legal grounds for refusing Ebays application, with my own experience and my worldly observations about Ebays and Paypals conduct and good "community and precidentally based reasons why it ought to not succeed.
I have had to read and write enormous amounts of documents... big ones, like 2 or 300 pages..... and what I find to be the most valuble things is to stick to the point, and eliminate the "fluff and etherial conjecture or the endless sob stories.
I try to put myself into the position of the people who have to decide, based upon what they read, and all of the material that they have to read, what gets submitted to the Commission and what gets filed under B for Bullshit or I for Irrelevant.
So the submissions really need to be focussed and confined to the basis for the comission REJECTING ebays application for an exemption to S47 of the fair trading act, and the unlawfulness of EXCLUSIVE TRADING.
The article at the beginning of this topic has illustrated these points in a nutshell.
One day after announcing the policy, eBay filed an exclusive dealing notification with the Australian Competition and Consumer Commission (ACCC), which administers Australia's Trade Practices Act 1974 and other acts.
The ACCC is inviting comments on eBay's exclusive dealing notification. Submissions are due by May 2, 2008 and can be sent via postal mail, email (adjudication@accc.gov.au) or fax.
According to the ACCC's website, "Exclusive dealing involves one trader imposing restrictions on another trader's freedom to choose with whom, in what or where they deal.
Exclusive dealing is prohibited under the Act in certain circumstances. For example, the Act prohibits a common form of exclusive dealing known as third line forcing.
Third line forcing is the supply of goods or services on condition that the purchaser also acquires goods or services from a third party."
And the one thing, that several people have raised...
A) Find out exactly what the issues are.
In this case they appear to be restricted to Ebays making application for an exemption to the s47 of the Trade Practice act (Australian), so that thye can engage in exclusive dealing and third line forcing.
B) Find out what the exact grounds are for making arguments against Ebays applicaiton.
Then state why it is unlawful and of a detriment to the market (sellers, buyers and the community at large) for their application to succeed
C) Confine ones argument to the relevant points.
D) Refrain from calling them names - like fuckwits and crooks - because this tends to make oneself look like an idiot and the focus if any on the relevant issues becomes diluted and possibly lost.
E) Then perhaps toss in some of ones personal and some broader expereinces of Ebay and Paypals disreputable and dishonest conduct, as reinforcement to ones argument that Ebays application for exemption to the principle for exclusive trading - being the monopilising and vertical integration of their own payment system, within their trading system, AND why it OUGHT NOT TO SUCCEED.
F) It's also been my expereince that no matter how much of an "arsehole or an idiot" some people are, or whether one likes them or not, or what ever, the only thing that really counts are FACTS, and GOOD REASONS.
So is ebays applicaiton a lawful application, and are there good reasons for upholding it.
This is what Ebay is trying to prove. This is what your opportunity to express yourself, gives you the chance to prove either materially (it's illegal) or on the basis of demonstrable GOOD REASONS, that if their application may be legal, but to allow it, is against the common interests of the consumers, the sellers and the market place, and the spirit of law in the principles invoked in S47 of the Fair Trading Act - in relation to Exclusive Trading.
Sort of like "It may be legal for someone of a certain predisposition to possess firearms, but it would be against the community's best interest that they not possess firearms"....
Assuming for a minute that Ebay's application was lawful and could succeed, would it be in the communities best interests for them to be allowed the exemption.
What impact would it have on the internet community, and what kind of effect would such a precident have on the global community.
I'd like to see MORE good arguments put forward in this forum....
And I am still going to really sink the boots into ebay - but with very shiny and well polished shoes.
Cheers.
Shane.
S47 of the Australian Trade Practices Act.
47 Exclusive dealing
(1) Subject to this section, a corporation shall not, in trade or commerce, engage in the practice of exclusive dealing.
(2) A corporation engages in the practice of exclusive dealing if the corporation:
(a) supplies, or offers to supply, goods or services;
(b) supplies, or offers to supply, goods or services at a particular price; or
(c) gives or allows, or offers to give or allow, a discount, allowance, rebate or credit in relation to the supply or proposed supply of goods or services by the corporation;
on the condition that the person to whom the corporation supplies, or offers or proposes to supply, the goods or services or, if that person is a body corporate, a body corporate related to that body corporate:
(d) will not, or will not except to a limited extent, acquire goods or services, or goods or services of a particular kind or description, directly or indirectly from a competitor of the corporation or from a competitor of a body corporate related to the corporation;
(e) will not, or will not except to a limited extent, re supply goods or services, or goods or services of a particular kind or description, acquired directly or indirectly from a competitor of the corporation or from a competitor of a body corporate related to the corporation; or
(f) in the case where the corporation supplies or would supply goods or services, will not re supply the goods or services to any person, or will not, or will not except to a limited extent, re supply the goods or services:
(i) to particular persons or classes of persons or to persons other than particular persons or classes of persons; or
(ii) in particular places or classes of places or in places other than particular places or classes of places.
(3) A corporation also engages in the practice of exclusive dealing if the corporation refuses:
(a) to supply goods or services to a person;
(b) to supply goods or services to a person at a particular price; or
(c) to give or allow a discount, allowance, rebate or credit in relation to the supply or proposed supply of goods or services to a person;
for the reason that the person or, if the person is a body corporate, a body corporate related to that body corporate:
(d) has acquired, or has not agreed not to acquire, goods or services, or goods or services of a particular kind or description, directly or indirectly from a competitor of the corporation or from a competitor of a body corporate related to the corporation;
(e) has re supplied, or has not agreed not to re supply, goods or services, or goods or services of a particular kind or description, acquired directly or indirectly from a competitor of the corporation or from a competitor of a body corporate related to the corporation; or
(f) has re supplied, or has not agreed not to re supply, goods or services, or goods or services of a particular kind or description, acquired from the corporation to any person, or has re supplied, or has not agreed not to re supply, goods or services, or goods or services of a particular kind or description, acquired from the corporation:
(i) to particular persons or classes of persons or to persons other than particular persons or classes of persons; or
(ii) in particular places or classes of places or in places other than particular places or classes of places.
(4) A corporation also engages in the practice of exclusive dealing if the corporation:
(a) acquires, or offers to acquire, goods or services; or
(b) acquires, or offers to acquire, goods or services at a particular price;
on the condition that the person from whom the corporation acquires or offers to acquire the goods or services or, if that person is a body corporate, a body corporate related to that body corporate will not supply goods or services, or goods or services of a particular kind or description, to any person, or will not, or will not except to a limited extent, supply goods or services, or goods or services of a particular kind or description:
(c) to particular persons or classes of persons or to persons other than
particular persons or classes of persons; or
(d) in particular places or classes of places or in places other than particular places or classes of places.
(5) A corporation also engages in the practice of exclusive dealing if the corporation refuses:
(a) to acquire goods or services from a person; or
(b) to acquire goods or services at a particular price from a person;
for the reason that the person or, if the person is a body corporate, a body corporate related to that body corporate has supplied, or has not agreed not to supply, goods or services, or goods or services of a particular kind or description:
(c) to particular persons or classes of persons or to persons other than particular persons or classes of persons; or
(d) in particular places or classes of places or in places other than particular places or classes of places.
(6) A corporation also engages in the practice of exclusive dealing if the corporation:
(a) supplies, or offers to supply, goods or services;
(b) supplies, or offers to supply, goods or services at a particular price; or
(c) gives or allows, or offers to give or allow, a discount, allowance, rebate or credit in relation to the supply or proposed supply of goods or services by the corporation;
on the condition that the person to whom the corporation supplies or offers or proposes to supply the goods or services or, if that person is a body corporate, a body corporate related to that body corporate will acquire goods or services of a particular kind or description directly or indirectly from another person not being a body corporate related to the corporation.
(7) A corporation also engages in the practice of exclusive dealing if the corporation refuses:
(a) to supply goods or services to a person;
(b) to supply goods or services at a particular price to a person; or
(c) to give or allow a discount, allowance, rebate or credit in relation to the supply of goods or services to a person;
for the reason that the person or, if the person is a body corporate, a body corporate related to that body corporate has not acquired, or has not agreed to acquire, goods or services of a particular kind or description directly or indirectly from another person not being a body corporate related to the corporation.
8. A corporation also engages in the practice of exclusive dealing if the corporation grants or renews, or makes it known that it will not exercise a power or right to terminate, a lease of, or a licence in respect of, land or a building or part of a building on the condition that another party to the lease or licence or, if that other party is a body corporate, a body corporate related to that body corporate:
(a) will not, or will not except to a limited extent:
(i) acquire goods or services, or goods or services of a particular kind or description, directly or indirectly from a competitor of the corporation or from a competitor of a body corporate related to the corporation; or
(ii) re supply goods or services, or goods or services of a particular kind or description, acquired directly or indirectly from a competitor of the corporation or from a competitor of a body corporate related to the corporation;
(b) will not supply goods or services, or goods or services of a particular kind or description, to any person, or will not, or will not except to a limited extent, supply goods or services, or goods or services of a particular kind or description:
(i) to particular persons or classes of persons or to persons other than particular persons or classes of persons; or
(ii) in particular places or classes of places or in places other than particular places or classes of places; or
(c) will acquire goods or services of a particular kind or description directly or indirectly from another person not being a body corporate related to the corporation.
(9) A corporation also engages in the practice of exclusive dealing if the corporation refuses to grant or renew, or exercises a power or right to terminate, a lease of, or a licence in respect of, land or a building or part of a building for the reason that another party to the lease or licence or, if that other party is a body corporate, a body corporate related to that body corporate:
(a) has acquired, or has not agreed not to acquire, goods or services, or goods or services of a particular kind or description, directly or indirectly from a competitor of the corporation or from a competitor of a body corporate related to the corporation;
(b) has re supplied, or has not agreed not to re supply, goods or services, or goods or services of a particular kind or description, acquired directly or indirectly from a competitor of the corporation or from a competitor of a body corporate related to the corporation;
(c) has supplied goods or services, or goods or services of a particular kind or description:
(i) to particular persons or classes of persons or to persons other than particular persons or classes of persons; or
(ii) in particular places or classes of places or in places other than particular places or classes of places; or
(d) has not acquired, or has not agreed to acquire, goods or services of a particular kind or description directly or indirectly from another person not being a body corporate related to the corporation.
(10) Subsection (1) does not apply to the practice of exclusive dealing constituted by a corporation engaging in conduct of a kind referred to in subsection (2), (3), (4) or (5) or paragraph (Cool(a) or (b) or (9)(a), (b) or (c) unless:
(a) the engaging by the corporation in that conduct has the purpose, or has or is likely to have the effect, of substantially lessening competition; or
(b) the engaging by the corporation in that conduct, and the engaging by the corporation, or by a body corporate related to the corporation, in other conduct of the same or a similar kind, together have or are likely to have the effect of substantially lessening competition.
(10A) Subsection (1) does not apply to a corporation engaging in conduct described in subsection (6) or (7) or paragraph (Cool(c) or (9)(d) if:
(a) the corporation has given the Commission a notice under subsection 93(1) describing the conduct; and
(b) the notice is in force under section 93.
(11) Subsections (Cool and (9) do not apply with respect to:
(a) conduct engaged in by, or by a trustee for, a religious, charitable or public benevolent institution, being conduct engaged in for or in accordance with the purposes or objects of that institution; or
(b) conduct engaged in in pursuance of a legally enforceable requirement made by, or by a trustee for, a religious, charitable or public benevolent institution, being a requirement made for or in accordance with the purposes or objects of that institution.
(12) Subsection (1) does not apply with respect to any conduct engaged in by a body corporate by way of restricting dealings by another body corporate if those bodies corporate are related to each other.
(13) In this section:
(a) a reference to a condition shall be read as a reference to any condition, whether direct or indirect and whether having legal or equitable force or not, and includes a reference to a condition the existence or nature of which is ascertainable only by inference from the conduct of persons or from other relevant circumstances;
(b) a reference to competition, in relation to conduct to which a provision of this section other than subsection (Cool or (9) applies, shall be read as a reference to competition in any market in which:
(i) the corporation engaging in the conduct or any body corporate related to that corporation; or
(ii) any person whose business dealings are restricted, limited or otherwise circumscribed by the conduct or, if that person is a body corporate, any body corporate related to that body corporate;
supplies or acquires, or is likely to supply or acquire, goods or services or would, but for the conduct, supply or acquire, or be likely to supply or acquire, goods or services; and
(c) a reference to competition, in relation to conduct to which subsection (Cool or (9) applies, shall be read as a reference to competition in any market in which the corporation engaging in the conduct or any other corporation the business dealings of which are restricted, limited or otherwise circumscribed by the conduct, or any body corporate related to either of those corporations, supplies or acquires, or is likely to supply or acquire, goods or services or would, but for the conduct, supply or acquire, or be likely to supply or acquire, goods or services.
Interpretations of the "Third Line Forcing"
http://www.mallesons.com/publications/2005/Nov/8201946w.htm
Five things you need to know . . . third line forcing
Third line forcing occurs when a supplier places a condition on the supply of its goods or services that the customer must acquire goods or services of a particular type from a third person nominated by the supplier. This practice is a form of exclusive dealing that is prohibited outright by section 47 of the TPA. This means that it will be illegal regardless of the supplier's purpose or its effect on competition.
In its review of the TPA, the Dawson Committee recommended that third line forcing be made subject to a “substantial lessening of competition” test in line with other forms of exclusive dealing.
This recommendation was initially incorporated in the Dawson Bill, however the Federal Government recently withdrew the proposed amendment and indicated that third line forcing will remain prohibited outright.
It is therefore timely to examine common types of third line forcing conduct and possible ways to avoid contravening the prohibition.
1. Typical third line forcing scenarios
The classic third line forcing scenario occurs where a supplier forces the purchase of a second product or service from a nominated supplier. For example, where a lender of finance insists that a borrower use a particular insurance company to insure a loan or where a car dealer selling a car requires the purchaser to obtain finance from a nominated finance company. Third line forcing also commonly arises where several suppliers of products or services participate in a co-promotion (for example, supermarket discounted petrol promotions) or a membership or loyalty program (for example, a credit card rewards program that offers reward points when members make purchases from nominated suppliers).
2. The element of compulsion and/or futurity
The courts have generally accepted that third line forcing conduct requires some element of compulsion and/or futurity. This means that it will not be third line forcing where a customer chooses (rather than undertakes) to acquire goods or services from another supplier, or where a supplier supplies goods or services to a customer as a benefit or reward for having already acquired goods or services from the third party supplier. In this way, it may be possible to restructure offers or supply arrangements to fall outside the third line forcing provisions.
3. Single supply of packaged product or service
The courts have also accepted that it will not be third line forcing where there is the supply of a single packaged product or service, rather than the supply of two distinct products or services. The most notable example of this approach is the High Court's decision in Castlemaine Tooheys Ltd v Williams & Hodgson Transport Pty Ltd (1986) 162 CLR 395. This case involved a brewery that was only prepared to sell beer to publicans on condition that the beer was delivered by a carrier engaged by the brewery. The High Court held that this was not third line forcing as the publicans were not obtaining two separate products from two separate suppliers. Rather, the brewery's arrangements for delivery of beer to the publicans amounted to the sale of one single composite product, namely “delivered beer”.
4. Utilising an agency relationship
Another way to avoid third line forcing is to use an agency relationship in supply arrangements. By entering into an agency agreement with the third party, a supplier can bundle together the products or services it supplies with those of the third party, as its agent. As the one supplier is providing both the first and second product or service, the third party is removed from the supply arrangements. This changes the conduct from “third line forcing” to another form of exclusive dealing known as full line forcing. The benefit of this structure is that full line forcing only breaches the TPA where it has the purpose, effect or likely effect of substantially lessening competition in a relevant market.
5. Notification of third line forcing conduct
If it is not possible to restructure the supply arrangements for practical or commercial reasons, it may be possible to gain statutory exemption from prosecution through the ACCC's notification procedure. Under this procedure, notifications are required to be in a prescribed form detailing the proposed conduct and the relevant participants. The cost of lodging a notification is $1000 for public companies and $100 for proprietary companies. The ACCC applies a "net public benefit" test to determine whether to allow immunity from prosecution. Immunity from prosecution is automatically granted 14 days from the date of lodgment unless, within the 14 day period, the ACCC notifies the parties otherwise. While the ACCC may remove the immunity at any time, it must provide notice to the parties and have a pre-decision conference before removing that immunity.
From the ACC Site:
(heaps in the site on it)
Exclusive dealing and third line forcing (s47)
Exclusive dealing
Broadly speaking, exclusive dealing occurs when one person trading with another imposes some restrictions on the other’s freedom to choose with whom, in what, or where they deal. This type of conduct is common between buyers and suppliers.
Sometimes the conduct is prohibited outright, other times it is subject to a test on whether it has substantially lessened competition in a market.
When it is subject to a substantial lessening of competition test, it is not enough to merely show that an individual business has been damaged. In this context the term 'substantial' is interpreted to mean an effect that is real or of substance. To determine whether a substantial lessening of competition occurs the overall market for the particular product and its substitutes, as well as whether or not the refusal would substantially restrict availability of that type of product to consumers, must be analysed. When territorial restrictions have been imposed as a condition of supply, it must be determined whether consumers are severely restricted in their ability to buy a product or its substitutes within the territory.
As a general guide, the more exclusive the product and the more powerful the supplier, the more likely it is that competition will be affected.
There are essentially two types of exclusive dealing: full line forcing and third line forcing.
Full line forcing
Full line forcing involves a supplier refusing to supply goods or a service unless the intending purchaser agrees not to:
* buy goods of a particular kind or description from a competitor
* resupply goods of a particular kind or description acquired from a competitor
* resupply goods of a particular kind acquired from the company to a particular place or classes of places.
However, for a full line forcing arrangement to contravene the Trade Practices Act it must have the effect of substantially lessening competition in the relevant market.
Third line forcing
Third line forcing is a specific form of exclusive dealing prohibited outright by the Trade Practices Act. It is not subject to the substantial lessening of competition test. It involves the supply of goods or services on condition that the purchaser buys goods or services from a particular third party, or a refusal to supply because the purchaser will not agree to that condition.
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