Each year the ACCC sets enforcement and compliance priorities
that are taken into account when pursuing competition and consumer
matters. In 2016, the ACCC warned that it would continue to take a
strong line on cartel conduct (see our article – ACCC 2016
Enforcement Priorities). ACCC has stayed strong to its word –
between January and June 2016 ACCC has issued $45.7 million in
fines against parties who engaged in cartel conducts.
What is Cartel Conduct?
Under the Competition and Consumer Act (2010) (Cth) (CCA)
companies are prevented from acting together instead of competing
with each other. Agreements to act together are designed to
increase profits of cartel members. Cartel conduct can occur
allocating customers, supplier or territories;
rigging bids or collusive tendering; or
controlling the output or limiting the amounts of goods and
services available to buyers.
A corporation who engages in cartel conduct can be fined the
three times the benefits obtained; and
if the benefits cannot be obtained, 10% of the defendant's
turnover during the 12-
month period ending at the end of the month in which the
corporation committed or began committing the offence.
Individuals who contravene these provisions can face prison
sentences for up to ten years and fines of up to $360,000 per
Between 2009 and 2012 Kaishi was involved in agreements to fix
prices, allocate customers and shipping routes and rig bids in
connection with international ocean shipments of transportation
vehicles to Australia.
Following an investigation by the ACCC, NYK (a global shipping
company based in Japan) pleaded guilty on 18 July 2016 to criminal
cartel conduct charges.
This is the first time a criminal cartel conduct matter has been
brought in Australia against a corporation since the introduction
of Australia's competition laws in 2009. NYK is still awaiting
judgment in Australia but individuals and companies involved in
this cartel have already faced prosecution in the United States,
Japan and Canada. In the United States, NYK was fined around
US$59.4 million and an involved executive was sentenced to 15
The fines and jail sentences are expected to be significant.
In early 2009, Colgate-Palmolive, PZ Cuzzons and Unilever agreed
to cease supplying standard concentrate laundry detergents and only
supply ultra concentrates to Woolworths.
Following proceedings brought by the ACCC and admissions by
Colgate, the Federal Court on 28 April 2016, ordered
Colgate-Palmolive to pay $18 million for cartel conduct. $12
million of that amount for involvement in a co-ordinated switch
from standard concentrate laundry detergents to ultra concentrates
and $6 million for sharing pricing information relating to its
laundry detergents, including proposed price increases.
Woolworths was penalised $9 million for its involvement in the
laundry detergent cartel. This penalty is the largest ACCC has
obtained against an accessory to contraventions of the CCA.
The proceedings between ACCC and Colgate-Palmolive, PZ Cussons
and Unilever have been on foot since 2013. PZ Cussons faced court
on 7 June and is awaiting the outcome while Unilever was granted
immunity under the ACCC's Immunity Policy.
Cable Cartel: Prysmian Cavi E Sistemi S.R.L.
On 22 July 2016, Italian company, Prysmian, was found to have
contravened price-fixing and market sharing provisions in its bid
to supply high voltage cables in 2003 in Australia for the Snowy
Hydro Project. This conduct was part of a wider foreign cartel
supplying land and submarine cables worldwide.
Parties in the cartel arrangement decided on a member to be the
successful tenderer for a particular project. Other members would
ensure that they did not submit a lower price than the chosen
member. ACCC alleged that the Snowy Hydro Project Agreement gave
effect to this cartel arrangement, ensuring that Prysmian submitted
the most attractive tender.
Prysmian's penalties are to be determined at a future date.
This case is a reminder that ACCC will enforce cartel laws in
relation to arrangements that are made outside of Australia but
have the potential to affect Australian businesses and
Lessons to Learn
Contravene cartel conduct provisions of the CCA and you will pay
the price! These recent proceedings initiated by the ACCC are proof
that penalties for contravening cartel conduct provisions are
severe and could even result in criminal convictions.
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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European competition authorities are also serious about resale price maintenance or suppliers fixing resellers’ prices.
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