The "Go To Jail" card will soon be issued to
individuals involved in serious cartel behaviour. Further to our
previous E-Alerts of 20 November and 8 December 2008, the Trade
Practices Amendment (Cartel Conduct and Other Measures) Bill
2008 has passed through the Senate and is currently awaiting
The new anti-cartel provisions criminalise price fixing,
restrictive outputs, bid rigging in tenders, and market sharing or
division. The test for price fixing under the Trade Practices
Act 1974 ("the Act") is amended to include
arrangements that have the purpose, effect or likely effect, of
directly or indirectly amounting to price fixing.
Our previous E-Alerts (available on
www.hunthunt.com.au) discussed the implications for vertical
supply agreements, the Australian Competition and Consumer
Commission ("ACCC") and the Commonwealth Director of
Public Prosecutions ("CDPP") proposed approach to the new
regime, and the "whistleblower" immunity provisions.
The Memorandum of Understanding referred to in our alert of 8
December 2008 remains unchanged. At the recent Competition Law
Conference 2009, the ACCC announced that it intends to publish a
guidance note on how the ACCC will manage cartel investigations.
The ACCC also stated at the Conference that "if the tests
under the Prosecution Policy of the Commonwealth are satisfied, it
should be clear to everyone that the ACCC will always support a
Individuals will now face potential criminal penalties of up to
10 years imprisonment and a fine of up to $220,000, and for a
corporation the stakes are the greater of: $10M, three times the
benefit gained from the cartel conduct, or 10% of the
corporation's annual turnover. Under the civil prohibition,
individuals may be liable for a penalty of up to $500,000 per
Increased Investigatory Powers
In addition to the existing powers under the Act, the ACCC and
the Australian Federal Police will have increased investigatory
powers for criminal investigations, including the ability to apply
for telephone interception and surveillance device warrants.
The Act will now contain both criminal and civil prohibitions,
which are not exclusive. The civil prohibitions on cartel conduct
essentially contain the same elements as the criminal scheme, with
the exception of the standard of proof and criminal fault elements.
If criminal proceedings fail, the ACCC retains the ability to
pursue civil proceedings. However, if a criminal conviction is
entered the civil proceedings will be withdrawn. This approach is
similar to that under the Corporations Act 2001 penalty
Exceptions – Joint Ventures and related bodies
Joint ventures for the production or supply of goods or service
constitute an exception to the anti - cartel laws by way of a full
defence against criminal and civil actions for cartel conduct. The
penalty provisions also do not apply to related bodies
The new anti-cartel provisions are extensively qualified and
companies wishing to include cartel provisions in their contracts
may request authorisation from the ACCC to do so, which will be
granted if the ACCC believes the public benefit from the conduct
would outweigh any public detriment.
If in doubt, seek legal advice
The ACCC has made it clear that criminal proceedings will be
pursued if the CDPP deems appropriate. The ACCC will not allow a
potential criminal conviction to be traded away by an offer to
resolve the matter through civil penalty proceedings (e.g. the
payment of large fine). The anti-cartel provisions are complex and
the courts will not forgive a miscalculation. If you are currently
party to a contract, arrangement or understanding that might
contravene the new provisions or if you are considering engaging in
such conduct, seek legal advice immediately. If you have any
questions, please contact one of our experts.
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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