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Cabcharge fined $14 million for ‘abusing market power’

Cabcharge has been fined $14 million plus costs in the Federal Court in Melbourne for three contraventions of section 46 of the Trade Practices Act 1974.

cabchargeACCC chairman Graeme Samuel welcomed penalty imposed on Cabcharge.

“The decision reflects the determination by the ACCC to seek significantly higher penalties for breaches of the competition provisions of the Trade Practices Act under the higher penalty regime that applies to post 2007 contraventions,” Mr Samuel said.

Cabcharge admitted to the three contraventions of the Trade Practices Act 1974, with two contraventions relating to Cabcharge refusing to allow competitors to process Cabchange non-cash payments with a third contravention relating to the supply of Cabcharge taxi meters below cost in an abuse of the company’s market power.

Justice Finkelstein in the Federal Court of Melbourne made declarations for each of three contraventions and ordered that Cabcharge pay a pecuniary penalty of $14 million for the contraventions, allocated as follows:

  1. $9 million in relation to Cabcharge’s refusal to deal with Mpos Australia Pty Ltd in 2008;
  2. $2 million in relation to Cabcharge’s refusal to deal with Travel Tab Australia Pty Ltd in 2005; and
  3. $3 million in relation to Cabcharge’s supply of taxi meters and fare schedule updates below cost between 2004 and 2007.

The court also made orders requiring Cabcharge to pay a contribution of $1 million towards the ACCC’s costs and to implement a trade practices corporate compliance program.

Mr Samuel said the $14 million figure incorporated a discount for a plea before trial in what would have been complex, lengthy and expensive litigation.

“The penalties imposed are a sharp reminder of the need for companies with market power to exercise such power wisely and legally,” Mr Samuel said.

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David Olsen

David Olsen

An undercover economist and a not so undercover geek. Politics, business and psychology nerd and anti-bandwagon jumper. Can be found on Twitter: <a href="http://www.twitter.com/DDsD">David Olsen - DDsD</a>

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