ACCC: Breaching the Trade Practices Act has never been more costly
“Business is on notice – the ACCC will be pursuing tougher penalties for anti-competitive behaviour, including cartels,” Chairman of the ACCC Graeme Samuel said today.
Speaking to an AICD luncheon in Melbourne, Mr Samuel noted that for around 14 years the maximum penalty for anti-competitive conduct, be it misuse of market power or cartel conduct, had been $10 million per contravention.
“We saw cases where the profit from the conduct for the company far outstripped the reach of the $10 million maximum penalty which, to put it frankly, made cartel conduct fairly good business.
“The Australian Parliament recognised the critical importance of strong sanctions in detecting, deterring and punishing cartel behaviour and other forms of anti-competitive conduct, and the available penalties now substantially outweigh any economic benefits associated with unlawful conduct,” Mr Samuel said.
Financial penalties for anti-competitive conduct in general were raised significantly with amendments to the Trade Practices Act which apply to conduct occurring after 1 January 2007. In 2009 criminal sanctions were introduced for serious cartel conduct.
“These changes bring Australia into line with other similar anti-trust regimes in Europe, USA Canada and Japan, by focusing on the impact of the conduct to calculate penalties and determine appropriate sanctions,” Mr Samuel said.
Mr Samuel has recently had discussions with lawyers, judges and regulators from around the world about anti-trust enforcement.
“There is growing international momentum to raise the stakes in anti-trust enforcement, because it has such a severe impact on consumers and competitors,” Mr Samuel said.
“Anti-competitive conduct has no borders in this global economy so co-operation and universally tough penalties go hand-in-hand.
“Make no mistake, the ACCC will be seeking higher penalties. The courts will be asked to apply penalties in the new legislative context and the ACCC will be advocating for the penalty regime to be used to its maximum effect.
“Hypothetically, this means that where a cartelist might have faced penalties in the tens of millions of dollars – in a case which affected a large number of consumers – it would now be facing penalties totalling hundreds of millions of dollars.
“In cases where we are satisfied that there is serious cartel conduct, we will be recommending criminal prosecution to the Commonwealth Director of Public Prosecutions, with the intent of putting high ranking executives behind bars.
“Those involved in anti-competitive behaviour are just like common crooks – they steal from consumers and bully their competitors while wearing flash suits and shiny shoes. The ACCC will advocate the imposition of a penalty which is no less, but no more than is realistically needed to deter future contraventions,” Mr Samuel said.