By Alli Peacock
Mining magnate Clive Palmer has responded to the axing of his A-League club Gold Coast United by creating a breakaway football body named Football Australia.
Palmer’s purported new venture (Football Australia) has been subject to vast media outrage in the past week. Due to conflicting statements about the purpose of this new venture, the question continues to remain unanswered. According to a media release, issued shortly before his press conference in Brisbane, Football Australia was created with the aim of replacing FFA. However, Palmer and FA’s newly-appointed chief executive, former A-League chief Archie Fraser, said the organisation was not necessarily out to topple FFA but would act as watchdog and forum for ideas in the sport.
This ‘watchdog’ mentality was evidenced in Palmer’s press conference in Brisbane; “What does Football Australia plan to do? It plans to publish papers, hold press conferences, seek opinions, lobby the government, lobby the FFA for a better outcomes for a better outcome for Australians and the game in Australia.” Whilst he could well have honest intentions, it seems alarmingly convenient that Palmer started a new body following his statement “The FFA has lurched from one disaster to another and needs to be replaced.”
1. Launching a Rival Company to FFA
The area of law the best relates to Palmer’s intended new venture is ‘obligations’. Obligations is an umbrella term for contract, tort and restitution, with the purpose of compensating others for wrongdoings. Since the firm has recently been created, there are no unconscionable or unfair practices in which they have engaged in. However, if Palmer competes with the FFA unconscionably, he may be subject to proceedings under the Competition and Consumer Act (including the Australian Consumer Law). This statute strictly prohibits unconscionable and unfair dealings pursuant to a significant detriment (financial or economic). The onus of proof however is on the FFA to prove that they have suffered an economic or financial detriment due to Palmer’s conduct. For the moment, Palmer is off the hook, but if he intends to act out of ‘spite’ he certainly needs to be aware of the legal consequences!
2. Unfair Competition
The term unfair competition means that the competitors compete on unequal terms, because favourable or disadvantageous conditions are applied to some competitors but not to others; or that the actions of some competitors actively harm the position of others with respect to their ability to compete on equal and fair terms. In practice, one competitor gains an advantage contingent on the other’s subsequent loss, whereby the gains are made in ways, which are illegitimate or unjust.
Unfair competition in a commercial context includes a number of areas in law including acts by one competitor or group of competitors which harm another in the field, and which may give rise to criminal offenses and civil causes of action. Applying matters discussed in the case, the most relevant area to address is ‘antitrust law’. Antitrust violations constituting unfair competition occur when one competitor attempts to force others out of the market (or prevent others from entering the market) through tactics such as predatory pricing or obtaining exclusive purchase rights to raw materials needed to make a competing product.
Again, it is still early days to prove unfair competition, but stay tuned for any ramifications from the creation of Football Australia!
This blog is for discussion purposes only. This must not be considered legal advice.
For legal advice on this topic and references to any information in this article, please contact
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