Restrictive trade practices : Temporary monopolies and Section 46 of the Trade Practices Act

In ACCC v. Universal Music Australia Pty Ltd (2002), the issue was whether the major record companies, Universal and Warner, in refusing to supply stock to retailers who sold imported CDs has contravened the Trade Practices Act 1974, in particular, s 46. The case is significant in that it demonstrates the uncertainty that still surrounds the elusive concept of market power and how to prove its existence. It also demonstrates the uncertainty surrounding the concept of a barrier to entry and, in particular, whether product differentiation should be regard as a barrier to entry. The dilemma for the trial judge, Hill J, in this case was whether to focus ion the market for recorded music generally where barriers to entry were not high, or whether to have regard to the monopoly which is afforded to each record company in related in CDs that feature in the charts at particular times as a result of the Copyright Act.