Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd
Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd, was a decision of the High Court of Australia, which ruled on 29 August 2007. The case concerned the principles of derivative governmental immunity: whether the immunity of a government from a statute extends to third parties that conduct business with the government. Baxter was a monopoly supplier of sterile IV fluid in the Australian market.
About Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd in brief
Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd, was a decision of the High Court of Australia, which ruled on 29 August 2007. The case concerned the principles of derivative governmental immunity: whether the immunity of a government from a statute extends to third parties that conduct business with the government. Baxter Healthcare Proprietary Limited was the Australian subsidiary of the multinational health care company Baxter International. Baxter manufactured intravenous and peritoneal dialysis fluids at various plants in Australia. Because of the cost of importing sterile IV fluids and the absence of a rival domestic producer, Baxter was a monopoly supplier of sterile IV fluid in the Australian market. A number of state governments issued requests for tender for the supply of sterile fluids and PD fluids. Baxter responded to the requests with tenders that put forward two alternative pricing options: either a state could purchase sterile fluids as a bundled package at a discounted rate, or the state could buy each product separately but at a higher rate.
The critical provision to the case was Section 2B of the TPA. It provided an immunity from state and territory governments from Sections 46 and 47 of the tPA insofar as the governments were not carrying on a business. The ACCC sought the imposition of injunctions and pecuniary penalties by the court. The High Court’s judgment in Baxter would mark a retreat from Bradken. The Federal Court of Australian found in Baxter’s favour at first instance. On 16 May 2007, the ACCC was granted special leave to appeal against the judgment of the full bench of the Federal Court. The Australian Government acted for the appeal. The full bench expressed unease about its own judgment, stating that the question of derivative government immunity should be left to the high Court for reconsideration. The decision was upheld on 16 May 2007 and the appeal was heard on appeal to the Federal Government Solicitor General. The court’s decision was held in favour of Baxter and Allops J’s appeal was held unanimously on appeal on May 16, 2007.
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