The latest Australian Competition and Consumer Commission (ACCC)
cartel enforcement action involves the institution of civil
proceedings in the Federal Court in Adelaide against Japanese
company Yazaki Corporation (Yazaki) as well as its Australian
subsidiary, Australian Arrow Pty Ltd (Arrow). The ACCC alleges that
these manufacturers of car parts, together with a competitor,
engaged in cartel conduct by coordinating their quotes for the
supply of wire harnesses to a global Japanese automotive
manufacturer and its related entities in Australia.
The ACCC alleges that the companies participated in a range of
activities in the period between 2003 and 2009 that is cartel
conduct (in breach of s 45 and s 44ZZRK (in relation to conduct
from 24 July 2009) of the Competition and Consumer Act
2010 (Cth) (CCA)), including:
exchanging and agreeing on prices before submitting quotes to
the Japanese automotive manufacturer for the supply of wire
harnesses to be used in the manufacture of its cars; and
allocating sections of the market to which they (or their
subsidiaries) would each supply wire harnesses to
The ACCC is seeking penalties, declarations, injunctions and
costs against the suppliers.
A directions hearing has been set down for Thursday, 10 January
2013 at 9.15am.
The ACCC's campaign against cartels – a
These proceedings reinforce the ACCC's active prosecution of
businesses suspected of engaging in cartel conduct that potentially
impacts on Australian consumers. It follows the regulator's
earlier campaign of issuing cautions and educating businesses, that
cartel activity will not be tolerated.
Infringement of either the civil or criminal cartel provisions
will result in significant pecuniary penalties. In criminal
proceedings, individuals may also face imprisonment for up to 10
years and individual fines of AUD500,000.
In early 2012, the ACCC Chairman Rod Sims warned businesses that
the regulator would be paying increased attention to cartel
conduct, by focusing on educating businesses and taking enforcement
action "to get the message across". A short film called
"The Marker" which addressed the impacts and penalties
resulting from cartel conduct was sent to CEOs of over 300 ASX
listed companies. There was a further direct mail campaign warning
2,500 executives in the heavy construction and construction supply
industries. In September 2012, the ACCC reiterated that cartel
conduct would continue as a priority of the regulator in
Although cartel conduct is notoriously difficult to detect, the
ACCC has demonstrated a willingness to spare no expense in bringing
such conduct to light. As at September 2012, Mr Sims reported that
there were 10 cartel prosecutions before the Federal Court of
Australia and a number of active cartel investigations under way.
More interestingly, the majority of the cartels were detected via
applications for immunity under the
policy for cartel conduct.
It is likely that these proceedings have been inspired by
similar actions brought against Yazaki and other cartel
participants by competition regulators in the United States and
Japan. The ACCC's institution of proceedings in Australia
against Yazaki and Arrow sends a clear warning to businesses that
the regulator will take decisive enforcement action as part of its
continued focus on preventing cartel conduct impacting on
Australian consumers across a range of industries.
Businesses should ensure that all commercial and contract managers
are aware of the cartel prohibitions under the Australian
competition law. Particular attention should be placed on
communications with competitors, whether occurring in a
professional or social setting, and employees should be advised to
take care to avoid discussion of any arrangements that could lead
to potential cartel conduct.
Additionally, businesses should have systems in place for early
detection of cartel conduct such that if there is a risk of
exposure, they can respond in a timely manner and attempt to seek
immunity under the ACCC's immunity policy.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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