Representing a significant step in Australian Trade Practices
law, both Houses of Federal Parliament last week passed the Trade
Practices Amendment (Cartel Conduct and Other Measures) Act 2009
(Cth) ("Amendment Act").
The Amendment Act will come into effect 28 days after it
receives Royal Assent.
In the making since the Dawson Review in 2003, the Amendment Act
substantially amends Part IV of the Trade Practices Act 1974 (Cth)
("TPA") by introducing significant civil and criminal
sanctions for cartel conduct.
It is anticipated that by adopting these amendments, Australia
will be brought into line with good practice adopted by many other
What is cartel conduct?
Conduct giving rise to a cartel can take many shapes and
To provide clarity in this respect, the Amendment Act pens a
'catch-all' definition which encompasses conduct giving
rise to a contract, arrangement or understanding between two or
more competitors that:
has or is likely to have the effect, of fixing prices, or
has the purpose of restricting outputs, allocating customers,
or rigging bids.
Practically speaking, an arrangement with a competitor which
involves price fixing; customer, supplier or territory allocation;
bid or tending rigging; or otherwise has the effect of restricting
output in the supply chain, can now potentially amount to a
A new era of accountability
While engaging in cartel conduct has long been outlawed under
the TPA, the Amendment Act adds a new dimension of personal
responsibility for directors and employees.
To establish a contravention of the criminal provisions, it must
be proved beyond reasonable doubt that:
the relevant contract, arrangement or understanding was made,
or given effect to, intentionally, and
the accused knew or believed that the relevant contract
arrangement or understanding contained a cartel provision.
A civil cartel contravention need only be proven on the balance
Harsh new penalties
The Amendment Act brings into play new and additional penalties
for the offence of 'giving effect to a cartel'.
For individuals, the maximum penalty is a term of imprisonment
for 10 years and/or a maximum fine of $220,000.
For corporations, the maximum penalty is the greater of:
three times the value of the benefit from the cartel; or
where the value cannot be determined, 10 per cent of annual
Compliance the best defence
In this new era of accountability, now more than ever,
compliance provides the best defence.
Ensuring all relevant people understand the requirements and
limitations imposed on conduct is critical in protecting your
business and its people.
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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