Cartel and anti-competitive conduct
The ACCC’s success surrounding its enduring priorities of cartel conduct and anti-competitive conduct has continued last year. The ACCC obtained record penalties in both the BlueScope Steel cartel conduct case in August 2023 and also the resale price maintenance case against Techtronic in December 2023. The penalties imposed in both cases send a strong message about the ACCC’s commitment to fair competition and preventing anti-competitive conduct, and the Court’s increasing willingness to impose heftier fines to deter parties from engaging in this type of conduct.
2023 enforcement priorities
In announcing its enforcement priorities in early 2023, the ACCC largely focussed on its successes in the previous year in securing criminal convictions and prison terms (though suspended) and reconfirmed its commitment to deterring harmful anti-competitive conduct using both civil and criminal prosecutions. Clearly, deterring and punishing cartel conduct and anti-competitive conduct, including the misuse of market power continue to be enduring priorities for the ACCC. However, we did not see the flurry of activity of new civil and criminal proceedings like we did in previous years, with the ACCC only commencing one new relevant civil proceeding against Swift Networks.
Major developments and activities
Bid rigging for the supply of technology infrastructure and services to the mining sector
The ACCC commenced civil proceedings against Swift in February 2023 alleging it had engaged in bid rigging when tendering to supply technology infrastructure and services to three Pilbara mining village projects. The matter proceeded swiftly, following admissions, with declarations, a penalty of $1.2m and the establishment of a competition law compliance programme and costs ordered following joint submissions by the parties. In his reasons, Justice Colvin found that Swift’s conduct was both deliberate and blatant, although carried out in ignorance of the law which he found to be no excuse or reason not to impose a civil penalty.
Record penalties for cartel conduct
In our ACCC 2022 in Review, we observed that the end of that year saw a key development in civil cartel proceedings. The regulator secured a judgment in the Federal Court against BlueScope and its former General Manager of sales and marketing, Mr Jason Ellis. The final sentencing concluded in early 2023 and the Court handed down an aggregate pecuniary of $57,500,000 against BlueScope and $575,000 (varied in September 2023 to $500,000) against Mr Ellis. The ACCC had also sought an order that Mr Ellis be disqualified from managing corporations for a period of seven years, however, significantly the Court was not prepared to make this order.
"We welcome this substantial penalty against BlueScope. It is important that penalties are sufficiently large to deter even large companies and their employees from breaching Australia’s competition laws."
ACCC Commissioner, Liza Carver
Liza Carver also stressed that,
"If BlueScope had been successful in reaching an agreement to fix prices with its competitors, this would have reduced price competition and increased prices for flat steel products which are widely used in the construction, manufacturing, automotive and transport industries."
Criminal proceedings and penalties progressing slowly
Our ACCC 2022 In Review also discussed the Bingo Industries cartel proceeding that was listed for sentencing in March 2023. While the parties have filed submissions on sentencing, the outcome is still pending. In the meantime, following further charges for criminal cartel offences being brought in the Federal Court in December 2022 against Aussie Skips Recycling, Aussie Skips Bin Services and their Chief Executive, Emmanuel Roussakis, for their involvement in the same cartel, the parties pleaded guilty on 27 February 2023. The sentencing outcome is still pending.
Resale price maintenance costs $15m
The ACCC issued proceedings in November 2021 against Techtronic, alleging that it engaged in resale price maintenance for the sale of power tools under the Milwaukee brand. In December 2023, the Court made several declarations including that by entering into 97 agreements between January 2016 and July 2021, which included a specified minimum price of sale, Techtronic had engaged in 97 occasions of prohibited resale price maintenance, Techtronic was also ordered to pay $15m in civil penalties.
"The ACCC submitted to the Court that this level of penalty was appropriate given the seriousness, duration and extent of Techtronic’s conduct. It sends a strong signal to deter others from engaging in RPM, and should serve as a warning for all other businesses. Resale price maintenance is illegal because it is harmful to price competition, which may mean consumers pay a higher price than they would in a truly competitive market."
ACCC Deputy Chair Mick Keogh
If the past two years are any indicator, 2024 should see the ACCC continuing to actively pursue offending conduct with significant penalties likely to become a regular occurrence for specific and general deterrence. Given several historical prosecutions were finalised in 2023, we anticipate that there may be a resurgence of civil and criminal proceedings this year to serve as a reminder to businesses that the ACCC takes anti-competitive conduct extremely seriously.
Read more from ACCC Year in Review
We look at the ACCC’s leading cases and other policy and regulatory activities throughout the year and then evaluate how well the ACCC performed against its ongoing enforcement priorities.
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