In ACCC v Coles [2014] FCA 1405, Gordon J at [102] observed (emphasis added):
Coles’ misconduct was serious. I reject Coles’ submission that these contraventions are somehow distinguishable, or of a less serious nature, because they did not involve vulnerable consumers. Coles’ conduct did not involve vulnerable consumers. Coles’ conduct did involve vulnerable suppliers – some of Coles’ smaller suppliers…. Indeed, their lack of size was one of the reasons why they were classified as Tier 3 Suppliers and targeted by Coles. These vulnerable suppliers were up against Coles – the second largest retailer of grocery products in Australia. It is unsurprising that Coles admits that it had substantially stronger bargaining power. It is difficult to envisage circumstances involving a larger disparity in bargaining power.
In their press release advising that they were bringing action against Woolworths for breach of s21, the ACCC noted(emphasis added):
The ACCC also alleges that these requests were made in circumstances where Woolworths was in a substantially stronger bargaining position than the suppliers, did not have a pre-existing contractual entitlement to seek the payments, and either knew it did not have or was indifferent to whether it had a legitimate basis for requesting a Mind the Gap payment from every targeted Tier B supplier.
1. What is meant by ‘bargaining power’? In what way is this the same or different to ‘market power’ in the context of s46? Could these actions against Coles and Woolworths been run using s46 instead of s21? If this is the case, then do any changes to s46 also have to consider s21?
Support your discussion by reference to case law and the discussion surrounding the Harper Review.
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