Tuesday, 17 July 2018

ACCC v Cussons - free pass for expert economist

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I was having a closer look at Justice Wigney's decision in the ACCC's unsuccessful case against Cussons for alleged cartel conduct.  I was very surprised to read (at para 400) that the ACCC chose not to cross examine Cussons' expert economist Professor George Hay. 

I've never heard of the ACCC ever giving the other side's expert, let alone their economic expert, a free pass on cross examination!

  1. Professor Hay’s opinion, in summary, was that it was likely that the Suppliers would have transitioned to ultra concentrates at the same time in early 2009 without any collusive arrangement or understanding. That was so for a number of reasons, including: that there was no economic incentive for an individual supplier to delay the introduction of ultra concentrates and forgo the economic benefits of reduced costs and possibly higher margins which were known to exist by 2008; the retailers’ strong economic reasons for requiring a prompt and simultaneous transition by all suppliers; and the retailers’ structured range review processes. Professor Hay was not cross-examined and his opinions were not tested or challenged.
  2. The Commission submitted, in effect, that the Court should prefer the opinions of Professor Williams. It expressly or implicitly criticised aspects of Professor Hay’s analysis and his opinions. In those circumstances it was somewhat unusual, if not unhelpful, that the Commission elected not to cross-examine Professor Hay. Be that as it may, the Commission’s efforts to persuade the Court to prefer Professor Williams’ opinions were unsuccessful. That was not simply a product of the fact that Professor Hay was not cross-examined. Ultimately, upon careful consideration of the respective reports, and taking into account Professor Williams’ oral evidence, and the evidence as a whole, the opinions of Professor Hay were found to be of more probative value and assistance than those of Professor Williams. Professor Hay’s evidence and his opinions were, on the whole, more persuasive than Professor Williams’. That is so for a number of reasons.

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