Taxi services company Cabcharge has been ordered to pay $15 million worth of costs and penalties by the Federal Court, which declared the company had abused its market power by refusing to deal with two competitors.
The Australian Competition and Consumer Commission launched action against Cabcharge in June, alleging 11 separate breaches of the Trade Practices Act.
In a final settlement between the ACCC and Cabcharge, the taxi company has admitted to three breaches, while the ACCC has agreed not to pursue the remaining eight.
Two of the three breaches involved Cabcharge’s refusal to enter into agreements with competing suppliers of processing services, while the third breach related to the supply of taxi meters at below cost price for an anti-competitive reason.
ACCC chairman Graeme Samuel said the penalty was the largest ever handed down for a misuse of market power case, and also said Cabcharge received a large discount on for its plea before trial, which prevented a lengthy, complex and expensive legal trial.
“The penalties imposed are a sharp reminder of the need for companies with market power to exercise such power wisely and legally,” Samuel said in a statement.
In a brief statement, Cabcharge said it was pleased to have avoided a lengthy trial, but denied any actual loss was suffered by competitors or consumers as a result of the Trades Practices Act breaches.
The company was also at pains to point out this was its first run-in with the ACCC since it was established by founder Reg Kermode in 1976.
“Cabcharge will continue to work cooperatively with the ACCC as it has done now for over 30 years, with this one blemish on its record.”
The judge in the case, Federal Court Justice Ray Finkelstein, is yet to publish his written reasons for the decision.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
