Case note: lender and broker not in competition

In Australian Competition and Consumer Commission v Australia and New Zealand Banking Group Limited [2015] FCAFC 103 the Federal Court of Australia – Full Court dismissed an appeal by the ACCC against a decision that ANZ Bank had not breached the price fixing provisions of the Trade Practices Act 1974 (the Act), now the Competition and Consumer Act 2010 (CCA) by limiting the amount of a refund a mortgage broker, Mortgage Refunds Pty Ltd, could provide to its customers in respect of arranging ANZ home loans.


Critical to the ACCC’s case was the allegation that ANZ and Mortgage Refunds competed against each other, and other banks and brokers, in the market for the supply of loan arrangement services.

The Full Court upheld the primary judge’s finding that ANZ, through its branches and other internal channels, did not participate in any market in which brokers, such as those engaged by Mortgage Refunds, provided loan arrangement services to potential borrowers. ANZ was not, therefore, in competition with Mortgage Refunds. Therefore, s 45A of the Trade Practices Act did not apply.

It agreed that “once it is accepted that the ANZ branches did not supply loan arrangement services to prospective customers, but rather performed a sales or distribution service on behalf of ANZ Mortgage Group or ANZ in the market for the provision of loan products, it must follow that ANZ did not relevantly compete with independent mortgage brokers, including Mortgage Refunds.”

The Full Court concluded that:

“there were significant and material differences between the services provided by ANZ branches and franchisees, and other loan providers, and the services supplied by Mortgage Refunds, and other mortgage brokers. The main difference was that ANZ only provided advice and assistance in respect of its own products. Likewise with the other loan providers. Mortgage Refunds and other brokers, however, provided advice and assistance in relation to many different loan products from many different loan providers. Indeed, the ability to provide comparative advice was seen by both the brokers and the customers alike as the major drawcard for brokers. This led the primary judge to conclude that the services provided by the bank branches, including ANZ branches, were not substitutable for the services provided by brokers. This in turn led to the conclusion that ANZ and Mortgage Refunds did not compete in the same market for services.”

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