SECTION 27

  1. In terms of section 27, the core concern is:

whether Telecom's aggregated contracts with Lower Hutt customers accepting their new prices, including regionally discounted line rentals, have the purpose or effect, or are likely to have the effect of substantially lessening competition in the market for fixed telephony in Wellington.

  1. Section 27 provides that:

(1) No person shall enter into a contract or arrangement, or arrive at an understanding, containing a provision that has the purpose, or has or is likely to have the effect, of substantially lessening competition in a market.

(2) No person shall give effect to a provision of a contract, arrangement, or understanding, that has the purpose, or has or is likely to have the effect, of substantially lessening competition in a market.

(3) Subsection (2) of this section applies in respect of a contract or arrangement entered into, or an understanding arrived at, whether before or after the commencement of this Act.

(4) No provision of a contract, whether made before or after the commencement of this Act, that has the purpose, or has or is likely to have the effect, of substantially lessening competition in a market is enforceable.

Relevant Market

  1. Staff have adopted, for the same reasons, the market definition used in the section 36 analysis. The appropriate market for assessing substantial lessening of competition is therefore the market for the provision of fixed telephony services in Wellington.

Contract, Arrangement or Understanding

  1. The relevant contract, arrangement or understanding for the purposes of section 27 is considered to be the aggregated contracts between Telecom and its customers in the Lower Hutt area who have accepted Telecom's post-Saturn price offering. While the usual examples of contracts, arrangements or understandings under section 27 are those which set prices, restrict output, allocate territories or the like, other contracts which are entered where only one party has an anti-competitive purpose can fall for consideration under section 27. #62
  2. Section 3(5) of the Commerce Act provides for the aggregation of provisions to help assess overall anti-competitive effect:

For the purposes of section 27 of this Act, a provision of a contract, arrangement, or understanding shall be deemed to have or to be likely to have the effect of substantially lessening competition in a market if that provision, and

  1. The other provisions of that contract, arrangement, or understanding; or
  2. The provisions of any other contract, arrangement, or understanding to which that person is a party -

taken together, have or are likely to have the effect of substantially lessening competition in that market.

  1. While it is not explicit within the section, it is considered that one should only aggregate the provisions of other arrangements when applying section 27 to the person who is party to all of them.
  2. The relevant provisions of those arrangements are those which relate to the prices discounted by Telecom for those of its packages which compete with those packages offered by Saturn in the relevant market.

Purpose or (Likely) Effect

  1. A provision will be deemed to have a purpose if the provision was included for that purpose and that purpose is a substantial purpose. #63 Not all parties to the contract, arrangement or understanding need to be shown to share that purpose. Unilateral purpose is sufficient. Once the contract is concluded the parties must be taken to share the purposes of its provisions. #64 The first question to be addressed here is whether in fact Telecom had, as a substantial purpose, the substantial lessening of competition.
  2. The issue of anti-competitive purpose has been considered in respect of the analysis of Telecom's conduct under section 36. Similar reasoning can be applied in respect of section 27. It is considered that there is not sufficient evidence of anti-competitive purpose to show a breach of section 27, for the same reasons that Telecom is considered by staff not to have the requisite purpose under section 36, particularly:
  • Pricing by Telecom of its discounted packages in Lower Hutt appears to be above AIC;
  • Telecom's matching of Saturn's prices and the period of the relevant contracts are consistent with its stated position of being price competitive;
  • Other issues such as probable recoupment and cross-subsidisation do not assist, in this case, in establishing anti-competitive purpose; and
  • An absence of other evidence showing anti-competitive purpose.
  1. As a general rule (with potential for exceptions) there seems no reason why a monopolist should not be able to give discounts, in accordance with normal practice, like any other trader.#65 This benefits consumers as well as encourages efficiency on the part of the monopolist. #66 The circumstances of discounts may, nonetheless, give rise to competition concerns.
  2. In Port Nelson, it was a concern that a discount was conditional upon a bundle of both contestable and non-contestable services being taken. In its structure it was designed to exclude competition in contestable services rather than encourage incremental purchases. That case can be distinguished from the present circumstances where the purpose of the discount appears to be intended to encourage incremental purchases.
  3. The following analysis under section 27 will therefore focus on whether the agreements have the (likely) effect of substantially lessening competition in the relevant market.
  4. Section 27 requires proof of a substantial lessening of competition, not merely aggressive competitive conduct. The (likely) effect of the relevant arrangements must therefore impact upon the competitive process in the particular market structure. #67
  5. It seems that the competitive process, at least in Lower Hutt, has been enhanced by the entry of Saturn, and the subsequent matching of prices by Telecom. However, the conduct needs to be assessed in the broader Wellington region as well.
  6. It may be that the substantial lessening of competition is actually felt in that area of Wellington that excludes Lower Hutt, given that Saturn may remain in the Lower Hutt undeterred by Telecom's pricing but limit its plans for expansion. If one considers there to be only one Wellington market which includes Lower Hutt, can section 27 be breached if the substantial lessening of competition is only felt in a segment of the relevant market?
  7. There may be circumstances where a substantial lessening of competition in a significant section of a market, rather than the entire market, can nonetheless give rise to a breach. #68 In these circumstances, the crucial factor is the degree to which competition is lessened, not the proportion of that lessening to the whole of competition which exists in the total market. Thus a lessening in a significant section of the relevant market may constitute a substantial lessening of competition in that market. #69
  8. In essence, there must be a substantial lessening of competition in the market as a whole, although its effects may be primarily or entirely felt in particular sub-market(s). This seems to have been accepted by the Court of Appeal in Port Nelson, where it held that competition in a market might be substantially lessened even if that lessening occurred only over part of the market and some participants in the market were unaffected. #70 Consequently while it may be argued that the effect is likely to be felt in that area of Wellington excluding Lower Hutt, this can be a substantial lessening of competition in the entire relevant market.
  9. The question to address is whether the relevant provisions of the contracts have the effect, or are likely to have the effect, of substantially lessening competition. This requires an objective inquiry into results.

Substantial Lessening of Competition

  1. The meaning of "substantial lessening of competition" is best explained by breaking down its elements, and examining them each in turn.
  2. Competition is the process of rivalry between firms, where each market participant is constrained in its price and output decisions by the activity of other market participants. Competition is defined in s 3(1) of the Act as "workable or effective competition". Workable competition exists when there is an opportunity for sufficient influences to exist in any market, which must be taken into account by each participant and which constrains its behaviour. #71 Whether firms compete is very much dependent on the structure of the markets in which they operate. #72
  3. It seems that the Commission and the Courts are moving away somewhat from the view that market power should be the determining factor in the substantial lessening of competition test. Rather than focus solely on structural factors, it has been suggested that behavioural factors are also relevant. This would seem particularly relevant to a predatory pricing case, which by definition involves strategic behaviour. In appropriate cases, the Commission has applied a test that incorporates behavioural elements in determining a practice's impact on competition. #73 While it is unlikely that the Courts will read market power out of section 27 altogether, the level of market power required to trigger the section may be quite moderate. Thus behavioural elements need to be examined in a competition analysis in addition to structural criteria.
  4. Substantial is defined in section 2(1A) of the Act as "real or of substance". Case law is not entirely helpful: the word has been held to be "large and weighty", "as distinct from ephemeral or nominal", and "importing a greater rather than a less degree of lessening".#74 In Port Nelson, Gault J determined that reference in section 27(1) to 'substantial lessening competition' is taken as meaning "lessening of competition in a way which is more than insubstantial or nominal. The merely ephemeral or minimal will not suffice. Inevitably, that will involve some attention to relativity; and in the end be a question of judgement on a matter of degree". #75 Thus a substantial lessening of competition is best considered as a lessening of competition in a more than insubstantial or nominal way.
  5. Section 3(2) of the Act defines lessening to include preventing or hindering competition. It is not therefore simply a matter of comparing scenarios before and after the conduct. It may be that without the conduct, competition would be likely to increase in the relevant market, and the conduct will prevent or reduce the potential increase in competition.
  6. There is little evidence that the effect on competition has been substantially lessened in this case to date. Prices are lower, efficiencies are presumably higher, and Saturn has not been eliminated from the market. Saturn has stated to Commission staff that [

    ] Thus the more pertinent concern is whether the contracts that Telecom has entered are likely to have the effect of substantially lessening competition. "Likely" is best interpreted as meaning a real and substantial risk that the stated consequence will happen. #76

  7. In the present circumstances, one issue is whether, if there is a likelihood that Saturn will be restricted from expanding in the relevant market or that it will be eliminated from that market, this can be argued to be a substantial lessening of competition. On the face of it, one might argue that Telecom has engaged in strategic behaviour that will have an effect on the structure of the market, namely by removing a significant competitive constraint on Telecom's conduct.
  8. However, it is important to note that the analysis should not focus on competitors but on competition. But in the absence of other competitors and considering the high barriers to entry in the relevant markets, the deterrent effect such elimination may have is arguably a lessening of competition in itself.
  9. It could therefore be opined that there is a real, not remote possibility that Saturn, seeing itself trapped in a low profit area with little hope of expansion would exit the market, leaving Telecom a monopoly as before. However, as Gault J said in Port Nelson, #77 section 27 requires proof of the substantial lessening of competition - not merely aggressive competitive conduct. The purpose or (likely) effect must be more than short-term and must impact upon the competitive process in the particular market structure.
  10. It has been put to the Commission by Saturn [

    ]

  11. Staff considered whether there could be a substantial lessening of competition should Saturn exit or be otherwise hindered in its competitive engagement with Telecom, due to its inability to compete with Telecom when competitive conditions (eg. price, range of services, quality of service) in the relevant market do not appear to be greatly different and prices are not below cost. Albeit in a discussion on purpose, McGechan made a statement in Port Nelson that underpins the position that competition is not substantially lessened simply by pricing to meet the market. Something more seems to be needed: #78

It is not breach of s 27 simply to price competitively. A firm which contains through efficiency, or willingness to contain profit margins, undercuts rivals or potential entrants may have the elimination of competition as one of its purposes. (Despite ritualistic public pronouncements welcoming competition, most firms would much prefer a clear field.) Such efficiencies and profit containment nevertheless are regarded as in the public interest. Such scenarios are competition in action; to be promoted by the Act, not prevented by it. If less efficient or more rapacious competitors are killed, so be it.

For breach of s 27 to occur, pricing must go rather further. Pricing must be below cost.

  1. Indeed, in Port Nelson, the minimum pilotage charge that was under scrutiny was not in itself likely to substantially lessen competition (though it was below cost), but was likely to substantially lessen competition in the context of a tug tie which drove the competitor into a small vessel area, reinforced by a five per cent discount that was conditional on the uptake of a bundle of contestable and non-contestable services.
  2. In the present circumstances, one must take account of the fact that Saturn's costs were not likely to be known by Telecom; that Telecom did not attempt to undercut such costs in a calculated manner, but instead matched the retail prices of some of its packages; and that Telecom's pricing did not pre-date that of Saturn but followed its lead. [

    ]

  3. If one does not take the price information submitted by Telecom at face value, contravention of the Act by Telecom will still be dependent upon requirements other than below-cost charging. There is no presence of additional related anti-competitive conduct (as there was in Port Nelson) by which one could presume Telecom is seeking to reinforce any lessening of competition in the market.
  4. The Court of Appeal in Port Nelson seemed to be considerably influenced by other steps taken by the dominant firm in that case. The Court concluded that the combined, perhaps synergistic, effect of the relevant tie, discount and minimum charge was to substantially lessen competition: #79

Below cost pricing will not frequently give rise to competition law concerns. The reduction of prices generally will reflect competition at work: Brooke Group Ltd v Brown & Williamson Tobacco Corporation 125 L Ed 2d 168 (1993). But because of the effect of the tug tie and the discount (the larger the vessel the greater the available discount) upon the existing competitor and potential entrants in the pilotage markets - effectively confining them to the smaller vessel end of the market - the below cost charge by PNL for pilotage must be seen as exclusionary and the conclusion of the High Court that it was likely to substantially lessen competition cannot be said to be wrong.

  1. Clearly there is a direct relationship and synergy between the different aspects of conduct considered in Port Nelson which appears to be absent from this case. In addition, in Port Nelson, the likely effect resulted from a price below cost which the competitor had to match, in the present circumstances, this cannot be said to be the case. Here Telecom is matching the prices of the new entrant without pricing below cost.
  2. Saturn claims it is an efficient entrant, and that it is attempting to secure market share in Telecom's principal area of dominance (residential telecommunications) from a position of competitive advantage (ie. efficiency). If its attempts are constrained, so too are the dynamics of competition. Saturn also makes the point that if Telecom is correct in its contention for regional markets, then an efficient provider in a regional market should be able to compete meaningfully.
  3. Staff consider that it is meaningful competition if an efficient provider faces a competitor who does not go so far as to distort the competitive dynamics of the market through pricing below cost. The Commission would potentially be protecting a new entrant and not the competitive process if it were to determine that the matching of prices (albeit by an incumbent monopolist, and albeit selectively) had the likely effect of substantial lessening of competition.

Conclusion

  1. It is unlikely that Telecom's contracts have the purpose, or effect, or are likely to have the effect of substantially lessening competition in market for fixed telephony services in Wellington.
  2. On the basis of information provided by Telecom showing that its prices are above AIC and the absence of additional related anti-competitive conduct, it is difficult to say that any lessening of competition sources from those arrangements.
  3. As Gault J pointed out in Port Nelson: #80

The relevant inquiry is as to substantially lessening competition. That is not the same as substantially lessening the effectiveness of a particular competitor. Competition in a market is a much broader concept. It is defined in s 3(1) as meaning "workable and effective competition". That encompasses a market framework which participants may enter and in which they may engage in rivalrous behaviour with the expectation of deriving advantage from greater efficiency.

  1. Saturn claims [

    ] It also argues that, if the law permits Telecom to price regionally, no one is able to take advantage of market distortions because of the cross-subsidy potential. If this is so, then this is a policy matter and not an enforcement matter.

RECOMMENDATION

  1. Staff have concluded that Telecom's pricing in Lower Hutt does not disclose a breach of sections 27 or 36 of the Commerce Act. Staff recommend:
  • that the present investigation be terminated and the parties advised accordingly; and
  • that, in view of the Commission's interest in promoting competitive conduct in telecommunications markets, the Commission continue to monitor developments and compliance with the Commerce Act in the relevant markets.
  1. It is jointly owned by United International Holdings (Inc), a publicly listed telecommunications company and SaskTel, a crown-owned telephone company servicing Saskatchewan, Canada.
  2. While one of Saturn's rate sheets at Annexure 1 discloses that Saturn's second line rental costs $29.95 and the other sheet discloses it at $19.95, the latter figure has been confirmed by staff as the correct figure.
  3. Predatory pricing is only one form of predation: a strategy that raises rivals' costs (forcing them to raise prices or sustain losses) without raising one's own can achieve predation's objective.
  4. The Australian Federal Court noted "if (the principles evolved in U.S. jurisprudence on predatory pricing) make one thing clear, it is that the charge of predatory pricing must be related to the costs incurred by the price cutter": Eastern Express Pty Ltd v General Newspapers Pty Ltd & Ors (1991) ATPR 41,128, 52876 at 52,900.
  5. Baumol W, "Predation and the Logic of the Average Variable Cost Test", 24 J. Law & Econ 49 (1996) at 58, referred to in Miller F, "Predatory Pricing in Deregulated Telecommunications Markets", World Competition Law and Economic Review, 21 (2) Dec 1997, 65 at 85.
  6. Eastern Express Pty Ltd v General Newspapers Ltd & Ors (1992) ATPR 41,167, 40,284 at 40,307-8.
  7. Areeda P & Hovenkramp H, Antitrust Law 508 (Supp. 1995), referred to by Brodley, op cit, at 15.
  8. Areeda P and Turner DF, "Predatory Pricing and Related Practices under Section 2 of the Sherman Act", Harvard Law Review, 1975: see Baumol WJ, Superfairness: Applications and Theory, 1986.
  9. AVC may be a poor substitute for MC, as at certain levels of output it is possible to price below MC and above AVC, and the reverse at other outputs.
  10. The ATC test will allow for more instances of predatory pricing than does the AVC test.
  11. Joskow P and Klevorick A, "A Framework for Analysing Predatory Pricing Policy", Yale Law Journal, 1979.
  12. (1981) 668 F. 2d 1014, at 1035-1036.
  13. Nonetheless, it should be noted that certain principles of William Inglis and certain others evolving from other U.S. jurisprudence have been considered to provide useful guidance in applying the concept of predatory pricing to section 46 of the Trade Practices Act (the Australian equivalent to section 36 of the Commerce Act): Eastern Express v General Newspapers (1991), op cit, at 52,900.
  14. Baumol W, Koehn M and Willig R, "How Arbitrary is Arbitrary? - or, Toward the Deserved Demise of Full Cost Allocation", Public Utilities Fortnightly, 3 September 1987.
  15. Bruckman B et al, Predatory Pricing Law - A Circuit-by-Circuit Survey, American Bar Association, 1995.
  16. Unlike AVC, which is used to refer to short-run cost with capacity not adjusted to output volume, AIC is the long-run figure obtained after plant and equipment are adjusted so as to minimise the average cost of the pertinent output. The AIC of a service X includes any fixed cost that must be incurred on behalf of that product alone (see Baumol W and Sidak J, Yale Journal on Regulation, 1994).
  17. Miller, op cit, at 82.
  18. Brodley, Predatory Pricing: the U.S. Experience, Economic Theory, and a Proposed Approach,, 46.
  19. Commerce Commission v Port Nelson (1995) 6 TCLR 406; on appeal, Port Nelson v Commerce Commission (1996) 7 TCLR 217.
  20. Brodley, op cit, 49.
  21. Ibid.
  22. Telecom has included in the cost figures the foregone contribution a Saturn customer would have made to the Kiwi Share Obligation (KSO). [

    ]

  23. The sample base is 300 of the approximately 700 exchanges Telecom has. The model used for analysing local access aggregates costs over several parts of the distribution network from exchange to customer, and maps demand over the sample exchanges alongside the current configuration of the network.
  24. (1996) 7 TCLR 217, at 233.
  25. [

    ]

  26. Telecom's Articles of Association provide for "The Kiwi Share" which is held by the Minister of Finance on behalf of the Crown. Under the Articles, unless the Kiwi shareholder agrees otherwise, Telecom is bound to provide "an ordinary residential telephone service" in accordance with general principles. These principles basically involve (1) a local free-calling option being maintained for all residential customers; (2) that Telecom charge no more than the standard residential rental for ordinary residential telephone service; and (3) that the line rental for residential users in rural areas will be no higher than the standard residential rental. This obligation is known as the Kiwi Share Obligation.
  27. There is an exception in respect of economic policy matters communicated to the Commission by the Minister of Commerce under section 26 of the Act.
  28. Telecom Corp of NZ Ltd v Clear Communications Ltd (1994)6 TCLR 138.
  29. However, Gault J noted in the Court of Appeal judgement that "there is no such deficit proved if all telephone services including toll services supplied to residential subscribers are taken into account": Clear Communications Ltd v Telecom Corp of NZ Ltd (1993) 5 TCLR 413.
  30. Telecom Corp of NZ Ltd v Commerce Commission (1991) 4 TCLR 473, 499-500.
  31. See Clear v Telecom (1993) 2 NZLR 247. The High Court's relevant market definition was upheld in both subsequent appeals to the Court of Appeal and Privy Council.
  32. Federal Communications Commission, Order, Authorisation and Certificate, In the Matter of Telecom New Zealand Limited, released 31 December 1996.
  33. See eg. Victorian Egg Marketing Board v Parkwood Eggs (1978) ATPR 40-081.
  34. In practice, the process of defining markets is unlikely to be as precise and scientific as suggested by the SSNIP test. However, in the Commission's view the SSNIP approach provides a useful framework for assessing the question of what other products, or products from other areas, are substitutable for the product in the area in question as a matter of fact and commercial common sense. The test simply provides a means by which judgements on a case-by-case basis, using whatever information happens to be available or can be readily generated, can be made.
  35. See, eg. Telecom v Clear, op cit.
  36. "It was common ground that if the local services were taken alone the line rentals and such calling charges as are made (ie outside the free calls option) do not cover the cost of providing services. However there is no such deficit proved if all telephone services including toll services supplied to residential subscribers are taken into account": op cit.
  37. Port Nelson v Commerce Commission, Op cit, at 560.
  38. Queensland Wire Industries Pty Ltd v Broken Hill Pty Co Ltd (1989) 167 CLR 177 at 196.
  39. [

    ]

  40. Commerce Commission v Port Nelson Ltd (1995) 6 TCLR 406, at 441.
  41. Commerce Commission v Port Nelson (1995) 6 TCLR 406, 441-442.
  42. See eg. Miller, op cit.
  43. See eg. Investigation of Alleged Anti-competitive Behaviour in the Provision of Internet Services (dated 20 May 1997), infra.
  44. Ibid.
  45. Support for this comes from Queensland Wire Industries v BHP (1989) 167 CLR 177 where the test employed by Mason CJ and Wilson J for establishing use of market power was satisfied if the behaviour in question was possible only by virtue of the defendant's substantial market power. It must be shown that market power makes the action possible.
  46. Telecom Corp of NZ Ltd v Clear Communications Ltd (1994) 6 TCLR 138, 155.
  47. However, the converse was held not to apply: it does not follow from the existence of an anti-competitive purpose that one has used his or her dominant position: ibid.
  48. Port Nelson v Commerce Commission (1996) 7 TCLR 217.
  49. See Brodley, op cit, 51.
  50. Op cit.
  51. Clear Communications Ltd v Telecom Corp of New Zealand (1992) 5 TCLR 166, at 198.
  52. Commerce Commission v Port Nelson, (1995) 5 NZBLC 103,762, at 103, 809, McGechan J referring to Eastern Express Pty Ltd v General Newspapers Pty Ltd (1992) 106 ALR 297.
  53. See, eg. Port Nelson, op cit.
  54. Commerce Commission v Port Nelson, op cit, at 103,789.
  55. Ibid.
  56. (1995) 6 TCLR 406; and on appeal (1996) 7 TCLR 217.
  57. Brooks R, "Injury to Competition under the Robinson-Patman Act", University of Pennsylvania Law Review, (1961) 109 (6) 777-832, 789.
  58. Olympia Equipment Leasing Co v Western Union Telegraph Co, F. 2nd 370 (7th 1986) U.S., at 375, per Posner J, referred to with approval by the High Court in Clear Communications Ltd v Telecom Corp of NZ Ltd (1992) 5 TCLR 166.
  59. Eastern Express v General Newspapers (1991) ATPR 41-128, per Wilcox J at 52,895. Also see Union Shipping v Port Nelson (1990) 3 NZBLC 101,618 at 101.647.
  60. Telecom seems to be aware of this: its Chief Financial Officer, Mr Jeff White, was reported in the media (see Annexure 5) as saying on 19 May 1998 that Saturn would only have a case if Telecom were using its other operations to support unprofitable pricing in the (Lower) Hutt Valley, and that Telecom is making money from Telecom's residential services in the cities. He was also reported as saying that there is no argument so long as Telecom does not price under cost.
  61. Commerce Commission v Port Nelson, op cit, at 103,789.
  62. Eg. Stevedoring Services (Nelson) Ltd v Port Nelson Ltd (1992) NZAC 5, which involved contracts between Port Nelson and its customers, containing provision for a discount if a full line of Port Nelson services was taken.
  63. Section 2(5)(a) of the Commerce Act.
  64. Port Nelson v Commerce Commission, op cit, 563.
  65. Commerce Commission v Port Nelson, op cit, at 103,797, per McGechan J.
  66. Ibid.
  67. Port Nelson v Commerce Commission, op cit, at 236.
  68. See The NZ Vegetable Growers Federation (Inc) v the Commerce Commission (Unrep, High Court (Administrative Division), Wellington, M 431/87, 17 August 1988).
  69. Dandy Power, op citat pp 43,886-43,888. This passage was referred to with approval by the Court of Appeal in Tru Tone, op cit.
  70. Port Nelson v CC, op cit.
  71. See eg. Fisher & Paykel Ltd v CC (1990) 3 NZBLC 101,655 at 101, 678.
  72. QCMA (1976) ATPR 40-012 at p17, 246. Note that the substantial lessening of competition test is concerned with the state of rivalrous conduct in the market and not the economic fate of individual competitors.
  73. The Court in Tru Tone Ltd v Festival Records Retail Marketing Ltd (1988) 2 NZBLC 103,295, 2 NZLR 363 seems to have recognised the importance of considering behavioural elements when undertaking a competition analysis. In that case, the Court accepted that behaviour in the market should be considered in addition to the structural elements outlined in the QCMA case, op cit.
  74. See eg. Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees Union (1979) ATPR 40-138 at p 18,500; Dandy Power Equipment Pty Ltd v Mercury Marine Pty Ltd (1982) ATPR 40-135, at pp 43,886-43,888.
  75. Commerce Commission v Port Nelson Ltd (1995) 6 TCLR 406 at 434. While a majority of the Commerce Commission has stated that it considers that "substantial" conveys the idea of a proportion of the whole, ie. the extent to which competition is lessened by the practice relative to actual or potential competition in the relevant market (Weddel Crown Corp, op cit at 104,211), this approach is inconsistent with the reasoning of Deane J in Tillmanns Butcheries (op cit) from which the Commerce Act seems to have derived its "real or of substance" definition.
  76. Ibid, 562.
  77. Port Nelson v Commerce Commission, op cit, at 571.
  78. Commerce Commission v Port Nelson, op cit, at 103,808.
  79. Port Nelson v Commerce Commission, op cit, at 572.
  80. Port Nelson v Commerce Commission, op cit, at 564-565.