28 October 2010

Keeping Track of Static and Dynamic Incentives: The Australian approach to essential facilities

This Brief comments on the recent Decision of the Australian Competition Tribunal (‘the Tribunal’) in the Fortescue Metals Group (‘FMG’) case.1 FMG is an iron ore mining operator in the Pilbara region of Western Australia. The case concerned separate applications by FMG under Part IIIA of the Trade Practices Act to obtain access to four railway lines: the Mount Newman and Goldsworthy lines owned by BHP Billiton; and the Hamersley and Robe lines owned by Rio Tinto, in order to transport iron ore from various locations in Pilbara to the sea ports that would take the iron ore to its export markets. BHP Billiton and Rio Tinto (‘the owners’) opposed the applications for access, choosing to continue to operate these lines as part of their own integrated iron ore businesses.

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