This paper reviews the case of Stirling Harbour Services Pty Limited v Bunbury Port Authority as it was decided at first instance and then on appeal by the Federal Court. The paper looks at the questions, the main elements of the answers and some of the issues raised by the answers in this case. It does this with a view towards evaluating the Court's discussion of economic concepts and its ultimate judgement on the main issue of whether the impugned conduct in this case had led to a 'substantial lessening of competition'. The decisions at first instance and on appeal are of greatest importance because they clarify the meaning of, and proper tests for, whether conduct has the effect or likely effect of substantially lessening competition - a central concept in competition law in Australia and New Zealand. The decisions are also notable in their use of complex economic concepts, most particularly natural monopoly, contestability and strategic entry deterrence.
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