ACCC seeks to appeal Pacific National rail freight ruling in High Court

The ACCC wants the High Court to overturn a major rail freight ruling in order to ‘protect’ competition in Australia.

The legal battle relates to Pacific National’s acquisition of the Acacia Ridge freight rail terminal.

The competition watchdog has sought leave to take its fight to stop Pacific National’s acquisition of the Acacia Ridge freight rail terminal to the High Court.

The $205m acquisition, from rival hauler Aurizon, has been at the centre of a running dispute between the Australian Competition and Consumer Commission and the two rail companies since it was first announced in 2017, with the national competition watchdog arguing the sale would give Pacific National an effective monopoly on railing freight into northern Queensland.

The ACCC has lost successive legal bids to block the transaction, with the Federal Appeals Court last month upholding a May 2019 decision by Justice Jonathan Beach to allow the sale.

Announcing the ACCC would seek special leave to appeal to the High Court, chairman Rod Sims said he believed the full Federal Court’s decision did not recognise the impact of the proposed transaction.

“Competition depends on rivals having the chance to compete. While no one can predict the future, we do know that, with this acquisition, the barriers to entry would become effectively insurmountable and Pacific National’s near monopoly as the dominant rail freight carrier on the east coast would be entrenched,” Mr Sims said.

“A lack of competition in rail freight would likely lead to increased prices, for businesses and consumers around the country.”

Mr Sims said that if the ACCC was granted leave to appeal the decision, it would be the first time the High Court has considered Australia’s merger laws.

“We are seeking special leave to appeal to the High Court because it is vital for Australian businesses and consumers that competition laws are effective in protecting the competitive process,” Mr Sims said.

The terminal is currently the only point in Queensland where goods can be transferred from NSW’s standard gauge rail to Queensland’s narrow gauge track, or to road haulage.

In his original decision, Justice Beach said he may have accepted the ACCC’s argument that Pacific National’s ownership of the terminal could have the effect of reducing competition in Queensland’s freight industry had it not been for a voluntary undertaking offered by Pacific National on the last day of court hearings, giving guarantees around access and pricing for third-party users.

The ACCC’s appeal argued Justice Beach did not have the power to accept such an undertaking, and should not have done so even if the power existed.

But the Federal Court of Appeal in May dismissed the ACCC argument and went further, ruling the acquisition would not have breached competition laws even without the voluntary undertaking.