There is something deeply flawed about
Woolworths’ management and board in its inability to either realise when it has
done wrong or accept a fair verdict when their misdeeds are proven.

When the verdict concerns a particularly
egregious form of anti-competitive behaviour exposed by the ACCC and confirmed
by the Federal Court on Friday , and when it’s the second verdict concerning what are effectively thuggish
standover tactics, you could start questioning the very ethical basis of the

There also are ethical questions to be
raised about major law firms who willing act as mercenaries in anti-competitive
behaviour that amounts to little more than extortion.

To recap, when some little would-be
competitor applied for a licence to sell liquor in NSW, standard procedure by
both Woolworths and Coles was to send a bunch of lawyers around to threaten to
metaphorically beat them up. The threat – the extortion – was that unless the
little guy severely restricted his or her ambitions, Woolworths and/or Coles
would tie them up in legal objections, appeals, complaints and parking fines
that would take years to fight and quite possibly ruin small operators. (Well,
maybe not parking fines.)

As one victim told the weekend Fin Review:
“There was no choice because they extended the situation in the court for any
applicant and the applicant may have been struck for serious rental or holding
costs and they just string you out for a couple of years until you go broke.”

Coles confessed the errors of its ways and
pleased guilty to the ACCC’s charges, copping a $4.75 million fine, but
Woolworths, true to form, has fought the case all the way and looks like
continuing to do so. Aside from the penchant of the board and management for
wracking up massive legal bills, it sets a suspect moral tone for the whole company.

On Friday, there was no “sorry” from
Woolworths, just a defiant statement that implies there will be an appeal and that the court was wrong.

That should help earn it an even stiffer
fine when a penalty is decided. If Woolies can’t understand Ethics 101, maybe
they can count.

The other, undiscussed side of this
particularly case though is the way major law firms routinely act in a similar
manner for the Big End of town – exploiting legal costs and court delays to squash
and quash smaller opposition, willingly doing everything in their power to
avoid the substance of cases getting to court.

I’m not aware of any lawyer being struck
off for such behaviour – but we could all live in hope.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey