The competition watchdog has initiated Federal Court proceedings against Tasmania's state-owned ports operator, alleging it tried to shut a new pilotage business out of the market in order to protect its near monopoly on the island.
The breaches alleged by the Australian Competition and Consumer Commission could each carry a fine in excess of $10 million, but Tasmanian Ports Corporation (TasPorts) has strenuously denied the allegations and says it will vigorously defend the matter.
TasPorts owns and/or operates all of the state's ports but one, Port Latta, in northern Tasmania.
The ACCC said the TasPorts tried to stop a new business, West Australian-based Engage Marine, from edging in on pilotage services.
"In short, our case is that TasPorts sought to maintain its monopoly in towage and pilotage in Tasmania, resulting in higher prices and lower-quality services," ACCC chairman Rod Sims said.
Engage Marine had a contract with Grange Resources to operate at Port Latta and according to the ACCC wanted to break into other northern ports.
Perth-based Engage Marine alleges TasPorts prevented it from expanding:
• By failing to provide long term berths for its tug boats, and refusing to place Engage Marine on the shipping schedule, which is necessary for it to provide towage services
• By failing to provide training to Engage Marine's employees, which only it could provide
• By demanding that Engage Marine's sole customer pay about $750,000 a year in fees to TasPorts after the customer stopped contracting with TasPorts
Mr Sims said "anti-competitive conduct" could have an "enormous effects on users". "It means they're paying too much, it means they're not getting the advantage of innovative services," he said.
Mr Sims said the case was the first of its kind under the amended misuse of market power provision, an "important law reform designed to protect the competitive process and help us address the harm that anti-competitive conduct does to consumers and the Australian economy".
The ACCC has said it is "seeking injunctions, declarations, penalties and costs".
Allegations come in bumper year for TasPorts
In a statement, TasPorts said the issues raised by the ACCC were "based on unique situations; they involve a law that has not yet been tested".
The company said it had cooperated with the ACCC in its investigation and "takes all its legal and regulatory responsibilities and obligations very seriously".
TasPorts said it "remains focused on the efficient and safe operation of our ports in the interest of all Tasmanians".
TasPorts has just posted its best financial results since its inception in 2006, with a $12 million net profit.
Labor's infrastructure spokesman David O'Byrne questioned what the Government knew of the alleged wrongdoing and what was done to ensure TasPorts was operating appropriately. "This is an astounding development," he said. "The ACCC is not a radical body, it's a very conservative group and to take such action is significant."
A date for legal proceedings in the matter has not been set.