This article was first published in The Legal 500 - Cartels .
Cartels, including criminal cartels, remain an ACCC enforcement priority in 2024-2025, as does the prosecution of individuals and seeking custodial sentences for cartel conduct.
In this guide we outline the relevant legislative framework, enforcement authorities, and penalties in Australia. We also take a look at recent cases, trends, and expected developments over the next 12 months.
1. What is the relevant legislative framework?
Australia’s competition legislation is the Competition and Consumer Act 2010 (Cth) (CCA).
The cartel provisions are contained in Part IV, Division 1 of the CCA. Cartel conduct is prohibited per se, regardless of competitive eects. The CCA establishes corresponding civil liability provisions and criminal oences for making, or giving eect to, a contract, arrangement or understanding (CAU) between competitors or potential competitors containing a “cartel provision”.
A provision of a CAU will be a “cartel provision” if it is between two or more parties who are actual or potential competitors in relation to the supply, acquisition or production of the relevant goods or services and the provision has either:
the purpose or eect of xing, controlling or maintaining the price of goods or services supplied by any or all of the parties; or
the purpose of:
preventing, restricting or limiting the production, capacity, supply or acquisition of goods or services by any or all of the parties;
allocating customers or territories supplied by any or all of the parties; or
rigging bids.
either body corporates incorporated or registered within Australia or “carrying on business” within Australia;
Australian citizens; or
persons ordinarily resident within Australia or “otherwise connected with” Australia.
The criminal cartel oences have an additional “fault element” requiring proof that the accused had the requisite knowledge or belief of the essential elements of the oence. The oence must be established beyond reasonable doubt. By comparison, civil liability requires the elements to be established on the (lower) balance of probabilities.
There are a number of exceptions to cartel conduct, including for or in relation to:
joint ventures;
related bodies corporate;
the acquisition of shares or assets;
conduct that constitutes exclusive dealing or resale price maintenance;
collective bargaining conduct notied to the Australian Competition & Consumer Commission (ACCC ) (not bid-rigging); conduct subject to a grant of authorisation; and
the collective acquisition of goods or services (exception applies to price xing only).
The CCA also contains other exceptions which apply to but are not specic to cartel conduct, including for acts or things specically authorised by Commonwealth or State laws, provisions for the conduct of partnerships, certain employment conditions, and provisions relating exclusively to the export of goods of services (but only if full particulars are provided to the ACCC within 14 days of the CAU).
Part X of the CCA enables parties to international liner cargo shipping conference agreements to obtain partial and conditional exemptions from the cartel provisions. To benet from the exemption, the relevant conference agreements must be registered.
2. To establish an infringement, does there need to have been an eect on the market?
No, cartel conduct is prohibited per se, irrespective of competitive eect.
3. Does the law apply to conduct that occurs outside the jurisdiction?
Yes, the cartel provisions apply to conduct outside Australia in certain circumstances:
the cartel conduct must be in “trade or commerce within Australia or between Australia and places outside Australia”; and
the purpose of:for conduct outside Australia, the cartel provisions apply to:
preventing, restricting or limiting the production, capacity, supply or acquisition of goods or services by any or all of the parties;
allocating customers or territories supplied by any or all of the parties; or
rigging bids.
either body corporates incorporated or registered within Australia or “carrying on business” within Australia;
Australian citizens; or
persons ordinarily resident within Australia or “otherwise connected with” Australia.
4. Which authorities can investigate cartels?
The ACCC is responsible for investigating cartel conduct, managing the immunity/leniency processes and instituting civil cartel proceedings. The Commonwealth Director of Public Prosecutions (CDPP) prosecutes criminal cartels. The ACCC refers serious cartel conduct to the CDPP for consideration for criminal prosecution in accordance with a Memorandum of Understanding (MOU) between the two agencies. The Australian Federal Police (AFP) may also execute search warrants to obtain evidence in criminal cartel investigations.
5. What are the key steps in a cartel investigation?
The conduct of a cartel investigation is a matter for the ACCC as the responsible investigating authority. There are no legislative or other prescribed timeframes for an investigation (other than the six year time limit for the ACCC to commence proceedings to recover a civil penalty). Cartel investigations are typically protracted and often last years.
The ACCC gathers evidence voluntarily or through its compulsory information gathering and search and seizure powers (see Section 6).
Following an investigation, the ACCC may:
refer serious cartel conduct to the CDPP. It is a matter for the CDPP to determine whether to commence a criminal prosecution;
initiate civil proceedings in the Federal Court seeking penalties and other orders;
resolve less serious conduct by accepting court enforceable undertakings or through engagement and negotiation where the party may commit to do various things to address the conduct and ensure it does not recur; or
take no further action (such as for technical contraventions).
6. What are the key investigative powers that are available to the relevant authorities?
The CCA invests the ACCC with signicant investigatory powers.
Under s 155 of the CCA, the ACCC, the Chair or the Deputy Chair may issue a notice to a person if they have “reason to believe” that the person is capable of furnishing information, producing documents or giving evidence relating to a matter that constitutes, or may constitute, a contravention of the CCA. In December 2022, the Government introduced an amendment to make it clear that s 155 notices can be served on a person, whether or not in Australia, and therefore can extend to obtaining information in the possession, power or control of companies or an individual outside Australia.
Specically, the ACCC can issue three types of s 155 notices:
to furnish information;
to produce documents, or
require a person to appear before the ACCC to give evidence, orally or in writing.
It is an oence to fail to comply with a s 155 notice or knowingly provide false or misleading information in response to a s 155 notice. In ACCC v Rana [2008] FCA 374, the defendant was sentenced to gaol for refusing to comply, and aiding and abetting the failure of a company he controlled to comply, with a s 155 notice. In ACCC v Davies (No 2) [2015] FCA 1290, the respondent was ordered to perform 200 hours of community service for aiding and abetting a company’s failure to comply with a s 155 notice. The Court has also imposed nes for providing false or misleading information in response to a s155 notice (e.g., ACCC v Narnia Investments Pty Ltd [2009] FCA 395 and ACCC v Boyle [2015] FCA 1039, the latter involving the giving of false or misleading answers in a s 155 examination).
Since 1 January 2007, the ACCC has had the power to obtain a search warrant under Part XID, Division 4 of the CCA, authorising it to enter specied premises and seize documents and things, including electronic equipment and data storage devices, in relation to alleged contraventions of the CCA.
An executing ocer may make copies of evidential material and/or seize things. They may also require a person to answer questions or produce evidential material. A failure to comply with any such requirement is a criminal oence.
If a warrant is valid, an occupier must provide reasonable facilities and assistance. An occupier is entitled to observe the search being conducted, receive a receipt of each document or thing seized and request a copy of the material seized.
In criminal investigations, the AFP may also obtain a warrant under the Crimes Act 1914 (Cth) (Crimes Act).
The ACCC (together with the AFP) can also obtain a warrant allowing the interception of telephone communications or the installation of listening/surveillance devices.
7. On what grounds can legal privilege be invoked to withhold the production of certain documents in the context of a request by the relevant authorities?
Information or documents subject to legal professional privilege (LPP) do not need to be disclosed or produced to the ACCC under a s 155 notice or search warrant. Broadly, in Australia, LPP applies to:
condential communications between a client and a lawyer (generally including in-house counsel and lawyers qualied outside the jurisdiction), and in some circumstances, a client or its lawyer and a third party; and condential documents,
where the communication is made or the document was prepared for the dominant purpose of the client being provided with or obtaining legal advice, or for use in existing or anticipated litigation.
While privileged material can be withheld form production, the ACCC published updated guidelines in July 2022 including on its approach to privilege claims. Since then, the ACCC will request recipients of a s 155 notice to identify, categorise (eg which type of privilege) and explain each document, or part of a document, where LPP is claimed. This can be done through a privilege schedule provided with the response the notice.
8. What are the conditions for a granting of full immunity? What evidence does the applicant need to provide? Is a formal admission required?
Civil immunity
The ACCC’s Immunity and Cooperation Policy for Cartel Conduct sets out when an immunity applicant (corporation or individual) will be eligible for and granted conditional civil immunity. The policy was updated on 1 October 2019 (Updated Policy) with changes that included four new or strengthened conditions for immunity. Currently, an applicant will be eligible for immunity if it:
is the rst party to seek immunity for the cartel;
is or was a party to a cartel;
admits it has engaged or is engaging in cartel conduct and the conduct may constitute a contravention of the CCA, and for corporations only, the admissions are a truly corporate act;
has not coerced others to participate in the cartel;
has ceased or undertakes it will cease its involvement in the cartel;
has at all times provided full, frank and truthful disclosure, and cooperated fully and expeditiously when making the application, including taking all reasonable steps to procure the assistance and cooperation of witnesses (for corporations) and to provide sucient evidence to substantiate its admissions, and agrees to continue to do so on a proactive basis throughout the ACCC’s investigation and any ensuing court proceedings;
has entered into a cooperation agreement with the ACCC; and
has agreed to maintain condentiality regarding its status as an immunity applicant and the details of the investigation and any ensuing proceedings (unless otherwise required by law or with written consent).
One of the changes introduced in 2019 was the requirement for an immunity applicant to admit it has engaged in cartel conduct whereas previously, it was only necessary for an immunity applicant to admit that the conduct may have constituted cartel conduct. Another change is that at the time of an application, the ACCC will generally not grant immunity if the ACCC is already in possession of evidence that is likely to establish at least one contravention of the CCA. In the past, the ACCC would not grant immunity if it had received written legal advice that it has reasonable grounds to institute proceedings in relation to the cartel.
If a corporation qualies for conditional civil immunity, it may also seek derivative immunity for related corporate entities and/or for its current or former directors, ocers and employees who were involved in the cartel conduct. The conditions attaching to derivative immunity are the same as those for immunity.
Criminal immunity
If it considers the conditions for immunity are satised, the ACCC will recommend to the CDPP that it grant criminal immunity. The CDPP will make its own decision on such recommendation. If the CDPP considers the criteria for immunity are met, it will provide a “letter of comfort” to the applicant that it intends to grant criminal immunity. Before commencing any prosecution, the CDPP will then provide the applicant with a written undertaking granting criminal immunity. This applicant must continue to meet the conditions for immunity, and the ACCC can recommend to the CDPP to revoke the “letter of comfort”.
9. What level of leniency, if any, is available to subsequent applicants and what are the eligibility conditions?
Parties not eligible for “rst in” immunity may seek to cooperate with the ACCC, but there is no immunity from prosecution and there are no pre-determined discount levels or ranges that apply. It is a matter for the Courts to determine the appropriate penalty or ne, having regard to the extent of any discount for cooperation. The ACCC or CDPP will set out in submissions to the Court any cooperation provided by a party and their assessment of the extent and value of the cooperation. In relation to individuals who do not have immunity, in practice, the ACCC or the CDPP may provide “assurances” in return for them providing a witness statement to the eect that the person’s statement will not be used as evidence against the individual in civil or criminal proceedings (other than in any proceedings concerning the witness knowingly providing false or misleading evidence).
The Updated Policy sets out the factors the ACCC/CDPP will consider in assessing the cooperation of a party, such as whether the party:
approached the ACCC in a timely manner;
has provided signicant evidence of cartel conduct; and
has pleaded guilty (criminal).
The ACCC or CDPP may also require the cooperating party to make admissions, agree to a statement of facts, and/or provide evidence in proceedings. The Updated Policy makes clear that in assessing whether a cooperating party has provided signicant evidence of cartel conduct, the ACCC will consider the extent to which the evidence was previously unknown to the ACCC or materially advanced the ACCC’s case.
10. Are markers available and, if so, in what circumstances?
Yes, to obtain a marker, the applicant must describe the cartel conduct in sucient detail to enable the ACCC to conrm no other corporation or individual has obtained a marker or applied for immunity in respect of the cartel. Subject to this requirement, a marker can be requested on a hypothetical, anonymous basis.
If a marker is placed, it preserves the recipient’s “rst in” status for a dened period. The Updated Policy (see Section 8) states that a marker will lapse if sucient information is not provided to the ACCC within the “marker phase” or may be cancelled if the ACCC forms the view the applicant will not be able to satisfy the requirements (for e.g., where the conduct does not disclose cartel conduct).
11. What is required of immunity/leniency applicants in terms of ongoing cooperation with the relevant authorities?
To maintain civil or criminal immunity, a corporation or individual must provide full, frank and truthful disclosure and cooperate fully and expeditiously on a continuing basis throughout the ACCC’s investigation and any ensuing court proceedings. As part of the changes to the Updated Policy (see Section 8), this requirement was strengthened to be on a “proactive basis” and extends to corporations taking all reasonable steps to procure the assistance and cooperation of witnesses and for all applicants to provide sucient evidence to substantiate admissions of cartel conduct.
On 12 May 2023, the ACCC clarified the requirement for immunity applicants to provide ‘full, frank and truthful disclosure’ and cooperate ‘fully and expeditiously’ in an update to its frequently asked questions on its Immunity and Cooperation Policy (Immunity Policy FAQs). Specifically, the Immunity Policy FAQs expressly state that immunity applicants must provide all records of factual accounts given by witnesses, whether or not they are subject to claims of legal professional privilege. The ACCC will not however, seek immunity applicants to produce documents over which a claim for privilege may be made if they do not contain a factual account.
The Updated Policy also includes requirements that applicants enter into a cooperation agreement with the ACCC (and continue to comply with it) as well as maintain ongoing compliance and condentiality as to their status as an immunity applicant and the details of the investigation and any subsequent proceedings. The ACCC’s template cooperation agreement includes a schedule for detailing the specic initial actions an immunity applicant must comply with to obtain conditional immunity. According to the template agreement, an applicant is also required to comply with additional requirements of cooperation set out in writing by the ACCC from time to time to obtain and maintain immunity. Conditional immunity will only become nal after the resolution of any ensuing proceedings against cartel participants who do not have conditional immunity.
12. Does the grant of immunity/leniency extend to immunity from criminal prosecution (if any) for current/former employees and directors?
If a corporation qualies for civil/criminal immunity, it may also seek derivative immunity for current and former directors, ocers and employees who were involved in the cartel conduct. As a result of the Updated Policy, derivative immunity has been extended to related entities that share a common parent company with the corporate applicant (previously this category of related entities was not covered), as well as current and former directors, ocers and employees of any eligible related entities. The application must specify the relevant individuals for whom derivative immunity is sought. An individual may also apply for civil or criminal immunity if he or she was a director, ocer or employee of a corporation that is or was a party to a cartel.
13. Is there an ‘amnesty plus’ programme?
Yes, where a party is cooperating with the ACCC in respect of one cartel (for which it is not eligible for conditional immunity) and discovers a second, unrelated cartel, the party may apply for conditional immunity in respect of the second cartel and seek “amnesty plus” for the rst cartel.
Under “amnesty plus”, either the ACCC will recommend to the Court a further reduction in the civil penalty for the rst cartel or the CDPP will inform the Court of the full extent of the party’s cooperation so as to be taken into account in sentencing.
Eligibility for “amnesty plus” requires the party to be cooperating with the ACCC for the rst cartel and have conditional immunity for the second.
14. Does the investigating authority have the ability to enter into a settlement agreement or plea bargain and, if so, what is the process for doing so?
In civil cases, parties may agree in principle on the appropriate penalty to be imposed and make submissions to the Court accordingly.
The Court is not a “rubber stamp” but will usually give deference to the parties’ agreement. However, in a civil case instituted by the ACCC against Volkswagen under Australia’s consumer (rather than antitrust) laws in relation to the emissions scandal, the Federal Court rejected an agreed penalty of A$75million, and later imposed a penalty of A$125m. This is the second highest penalty ever imposed for a contravention of Australia’s consumer laws and was upheld on appeal by the Full Federal Court. The High Court (Australia’s highest court) refused Volkswagen’s application for special leave to appeal the Full Federal Court’s decision. More recently, in a civil consumer law case instituted by the ACCC against Uber for false or misleading representations, the Federal Court imposed a penalty of $21m, some $5m lower than the agreed penalty put forward by the parties.
In criminal sentencing, a prosecutor cannot agree on or make submissions as to the appropriate penalty or range, although it can indicate if the Court would fall into appellable error were it to impose a sentence within a penalty range submitted by the accused. However, in both civil and criminal cases, ultimately it is for the Court to determine the appropriate penalty/fine.
Civil proceedings can be settled at any time prior to judgment. The parties will usually le with the Court an agreed statement of facts and may also le joint submissions on penalty. In criminal proceedings, a settlement will usually involve agreement as to the charges to which the defendant will plead guilty, agreeing the parameters for settlement where permissible, and ling an agreed statement of facts.
In both civil and criminal matters, hybrid settlements, where some but not all aspects are agreed or settled, are possible.
15. What are the key pros and cons for a party that is considering entering into settlement?
Possible advantages of settlement include:
a reduction in the penalty/ne;
potentially signicant saving of costs, time and resources;
greater scope to shape and limit the facts and evidence forming part of the settlement; and
greater (but not absolute) certainty as to penalty and to a lesser extent, the ne.
Possible disadvantages of settlement include:
making admissions;
reputational damage;
greater risk of new third-party actions for damages or impacting existing actions;
limited or no scope to appeal; and
disclosure of certain settlement material such as an agreed statement of facts.
16. What is the nature and extent of any cooperation with other investigating authorities, including from other jurisdictions?
The ACCC is authorised to provide information obtained under a s 155 notice to an Australian and/or foreign government body (the latter includes an agency of a foreign government) if the Chairperson is satised the information will assist that body to perform or exercise any of its functions or powers.
The ACCC has also a number of arrangements with overseas competition agencies in relation to competition law enforcement activities. For example, in 2020, the ACCC entered into a MOU with the competition authorities in the US, UK, New Zealand and Canada (known as the “Five Eyes”) to establish a multilateral framework for coordination and cooperation between the countries. It also has numerous specic cooperation agreements with these and other countries. For example, the Governments of Australia and the United States have an agreement under which the parties assist one another and cooperate on a reciprocal basis in providing or obtaining antitrust evidence.
In the context of an immunity application, unless required by law, the ACCC will not share condential information provided by an immunity applicant with other regulators without consent but will as a matter of course request condentiality waivers for each jurisdiction in which the applicant has or intends to seek immunity or leniency. The ACCC typically adopts the same approach for cooperating parties. The ACCC may regard a failure to provide waivers as a failure to provide full cooperation.
There are also limited circumstances in which information (even protected cartel information) can be disclosed, including, for example, where the Chairperson of the ACCC is satised that the disclosure can assist other government agencies/bodies.
17. What are the potential civil and criminal sanctions if cartel activity is established?
Reforms to the CCA which came into effect on 10 November 2022 have increased the maximum penalties for cartel (and other CCA contraventions) five-fold.
For corporations, the maximum civil penalty or criminal ne per cartel contravention/oence now is the greater of:
A$50 million (previously A$10 million);
three times the total value of the benets that have been obtained by one or more persons that are “reasonably attributable” to the conduct; or
if the court cannot determine the total value of those benefits, 30% of the adjusted turnover of the corporate group during the period the contravention occurred, with a minimum period of 12 months (previously 10% of annual turnover for the 12 months preceding the contravention).
For individuals, the maximum civil penalties have increased to A$2.5 million per contravention, up from A$500,000 per contravention. The maximum criminal sanctions per offence remain unchanged as a fine not exceeding 2,000 penalty units, 10 years’ imprisonment, or both. However, as the value of a penalty unit is subject to indexation, the maximum criminal fines for individuals increased on 1 July 2023 from A$550,000 to A$626,000 (penalty unit of $313). Previously the maximum criminal fine was A$550,000 between 1 January and 30 June 2023 (penalty unit of $275) and A$440,000 between 1 July 2020 to 31 December 2022 (penalty unit $222). The Federal Government has flagged indexing the value of penalty units in line with inflation each year for the next three years.
The CCA prohibits corporations indemnifying ocers for pecuniary penalties and legal costs incurred in defending proceedings, in which the ocer is found to be liable for a penalty.
The ACCC can also seek a range of other orders against corporations and individuals including injunctions and disqualifying/banning individuals from managing corporations.
18. What factors are taken into account when the ne is set? In practice, what is the maximum level of nes that has been imposed in the case of recent domestic and international cartels?
The relevant factors the Court must have regard to in determining the appropriate civil penalty include the following, with the first four being mandatory considerations:
the nature and extent of the conduct;
any loss or damage suered;
the circumstances in which the conduct took place;
any previous ndings regarding the same or similar conduct;
the size and degree of market power of the company;
the deliberateness of the conduct;
whether the conduct was at the direction of senior management;
the company’s culture of CCA compliance; the extent of cooperation; and
specic and general deterrence.
In criminal matters, an oender is to be sentenced in accordance with the Crimes Act (Part IB). In particular, the sentence imposed must be of a “severity appropriate in all the circumstances of the oence”, and the Court must take into account the matters in s16A(2) (among others).
In CDPP v NYK [2017] FCA 876, the Court found the factors identied in civil penalty cases bear also upon criminal sentencing and most are, in any event, replicated in some way in the relevant considerations set out in the Crimes Act. Some of the specic factors in s16A(2) include:
the degree to which the person has shown contrition;
if the person has pleaded guilty to the charge;
the degree of cooperation with law enforcement agencies in the investigation of the oence or other oences;
the need for adequate punishment; and
the oender’s prospects of rehabilitation.
In practice, the highest penalty or fine awarded in Australia to date is A$57.5m imposed on BlueScope Steel Limited in April 2023 for 9 civil "attempts to induce" conduct although the case is currently on appeal (see Section 24 below). Piror to this, the A$46m imposed on Yazaki Corporation in May 2018 was the highest penalty in posed in Australia. This was for five separate civil contraventions involving the coordination of quotes with a competitor for the supply of wire harnesses used in the manufacture of certain Toyota vehicles supplied in Australia.
Some notable criminal nes imposed in Australia to date are A$25m against Nippon Yusen Kabushiki Kaisha, A$34.5m against Kawasaki Kisen-Kaisha Ltd (the largest fine imposed for criminal cartel offences under the CCA to date), and A$24m against Wallenius Wilhelmsen Ocean AS, all shipping companies, for cartel conduct in relation to the supply of shipping services to Australia. More recently, Bingo Industries and Aussie Skips were fined A$30m and A$3.5m respectively for engaging in criminal cartel conduct (the quantum of the fine imposed on Aussie Skips is subject to an appeal).
19. Are parent companies presumed to be jointly and severally liable with an infringing subsidiary?
There is no presumption of parental joint and several liability. However, under the CCA, if a corporation is a party to a CAU, related bodies corporate are taken (that is, legally deemed) to be a party to that CAU.
20. Are private actions and/or class actions available for infringement of the cartel rules?
Yes, private or class actions are available against cartel participants for damages as well as other relief. The ACCC may also make an application on behalf of other persons who have suered loss or damage as a result of cartel conduct.
21. What type of damages can be recovered by claimants and how are they quantied?
The CCA does not provide any guidance as to how damages are to be quantied. While the cases state the measure of damages is similar to those recoverable under the common law in tort (that is, to put the person in the position they would have been in had the cartel conduct not occurred), damages are not conned to those recoverable in tort.
22. On what grounds can a decision of the relevant authority be appealed?
First instance decisions of the Federal Court (single judge) can be appealed to the full Federal Court (usually three judges) on errors of law such as where the Court has applied an incorrect legal principle or ndings of fact could not be supported by the evidence. Full Federal Court decisions can be appealed to the High Court, with leave. The High Court will only hear cases of signicant importance, such as on new points of law, to resolve questions of law decided inconsistently by lower courts, or on matters of public importance. In criminal cases, except in very limited circumstances, appeals must only involve questions of law, unless leave is granted.
23. What is the process for ling an appeal?
An appeal can be initiated by either party within 28 days of the final orders by ling a notice outlining the grounds of appeal.
24. What are some recent notable cartel cases (limited to one or two key examples, with a very short summary of the facts, decision and sanctions/level of ne)?
In June 2022, in the sentencing of individuals for criminal cartel conduct for the first time in the Vina Money case, the Federal Court imposed the first ever custodial sentences on four individuals who pleaded guilty. The sentences ranged from 9 months, to two years and six months, although all were suspended, meaning no individual served term in gaol. Charges against a further individual who was contesting the charges were withdrawn shortly before the trial was to begin.
Vina Money operated a money remittance business in certain states in Australia. The charges concerned allegations of Vina Money fixing the price of the Australian dollar-Vietnamese done exchange rate and transaction fees with another company, Hong Vina. The individuals were charged with being knowingly concerned. Agreed facts before the Court included communications between the competitors and a large Vietnamese bank encouraging the competitors to agree on exchange rates instead of competing.
Since the Vina Money case, the ACCC and CDPP have secured further convictions from both corporations and individuals following guilty pleas. In the Alkaloids of Australia case, the company and its former export manager pleaded guilty to charges of making, attempting to make, and giving effect to several cartel arrangements with overseas pharmaceutical ingredient suppliers. In November 2022, the company was fined nearly $2m while the former export manager was sentenced to 2 years and 8 months’ imprisonment, the longest custodial sentence imposed to date, to be served by way of an intensive corrections order, including 400 hours of community service.
The Federal Court imposed sentences in two further criminal matters involving guilty pleas from both corporations and individuals - Bingo Industries and Aussie Skips. In February 2024, Bingo Industries was fined A$30 million fine (the second largest criminal fine imposed to date) and Aussie Skips was fined A$3.5 million. The former Bingo Industries CEO was sentenced to two concurrent terms of 18-months’ imprisonment - served by way of an intensive corrections order, including 400 hours of community service - and a $100,000 fine. Similarly, the former CEO of Aussie Skips was sentenced to 18-months’ imprisonment - served by way of an intensive corrections order, including 300 hours of community service - and a $75,000 fine. Aussie Skips has since lodged an appeal in respect of the quantum of the fine.
In civil cases, following the Federal Court finding that BlueScope Steel Limited and a former employee had attempted to induce certain participants in the steel industry to enter into price-fixing arrangements, in August 2023 the Federal Court imposed penalties totalling $57.5 million on BlueScope and $575,000 (subsequently corrected to A$500,000) on the former employee for his role in the conduct. Both BlueScope and the former employee have lodged appeals against the liability findings, which are yet to be heard.
In August 2023, in proceedings commenced by the ACCC, the Federal Court found that Delta Building Automation Pty Ltd and its sole director attempted to rig a bid in connection with a tender conducted by the National Gallery of Australia in Canberra in late 2019. The tender related to the replacement and ongoing maintenance of a building management system at the gallery. The sole director offered to pay the competitor in exchange for agreeing to rig the bid for the tender. Notably, the competitor rejected the approach, and the National Gallery did not suffer any loss as a result. Judgment is pending in respect of penalties and orders.
A similar bid rigging allegation by the ACCC was successful in ACCC v Swift Networks. In this instance, Swift Networks admitted it engaged in cartel conduct by bid rigging and price fixing when tendering to supply services, as well as equipment, to mining sites in the Pilbara region. On 7 September 2023, the Federal Court ordered Swift Networks to pay a A$1.2m penalty.
25. What are the key recent trends (e.g. in terms of nes, sectors under investigation, applications for leniency, approach to settlement, number of appeals, impact of COVID-19 in enforcement practice - e.g. dawn raids of domestic premises, ‘hybrid’ in-person/virtual dawn raids etc.)?
Cartel prosecution remains a priority
Cartels including criminal cartels remain an enduring ACCC enforcement priority in 2024-2025, as does the prosecution of individuals and seeking custodial sentences for cartel conduct. In its 2024-25 Compliance and Enforcement Priorities, the ACCC states that it “will always prioritise cartel conduct causing detriment in Australia.”
In 2023, the ACCC secured penalties in three civil cartel cases against Swift Networks (A$1.2m), ARM Architecture ($A900,000 for attempts to rig bids in relation to a $250m project) and BlueScope ($57.5m, on appeal on liability).
As mentioned above (see Section 24), the CDPP has continued its successes in securing guilty pleas in criminal cartel matters and the imposition of custodial sentences for individuals with the sentencing in February 2024 of Bingo Industries, Aussie Skips and two individuals from each company. While both individuals had custodial sentences imposed, the court ordered they be served as intensive correction orders in the community. Despite the entry of guilty pleas in criminal matters, no Australian court has yet to require an individual to serve a custodial sentence behind bars.
No convictions in contested criminal cases
The CDPP has not, yet secured a conviction in a criminal cartel matter where liability has been contested, with the accused in all contested cases to date either being acquitted or the charges withdrawn.
In the first fully contested criminal case against Country Care, the CDPP alleged that Country Care, its managing director and a former employee engaged in pricing fixing and bid rigging conduct. Country Care supplies rehabilitative and assistive technology products under several government and other contracts, and direct to the general public. After a lengthy 12-week hearing, the jury unanimously acquitted all accused after four hours of deliberations.
The CDPP prosecution of Citigroup, Deutsche Bank and ANZ, and numerous bank executives (Bank cartel case) concerned allegations arising out an ANZ capital raising in August 2015 which resulted in a significant shortfall. Following investigation by the ACCC, the CDPP laid charges in 2018 and the matter spent close to two and half years at the committal stage in the New South Wales Local Court before the accused were committed to stand trial in the Federal Court. All remaining charges in the case were withdrawn in early 2022 after the CDPP had first withdrawn all charges against ANZ and two of its executives. The CDPP dropped the charges in accordance with the Prosecution Policy of the Commonwealth, stating that there were no longer reasonable prospects of convicting the accused.
The ACCC subsequently instigated an internal review of the Bank Cartel case. It was expected that the ACCC would review and modify its approach in conducting criminal investigations to reflect learnings from the case. At the time of writing, while no express public statements have been made as to any process of policy changes as a result of the ACCC’s review, the change in May 2023 to the Immunity Policy FAQs (see Section 11 above) to make express the requirement that immunity applicants must provide all records of factual accounts obtained from witnesses, even if they are subject to privilege, is a result of the Bank cartel case where the immunity applicant sought to resist providing records of internal investigations on the basis of privilege.
The withdrawal of charges in the Bank Cartel case followed the CDPP withdrawing all charges against the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) and a union official for allegedly attempting to induce suppliers of scaffolding services to enter into cartel arrangements regarding prices for scaffolding services provided to builders in the Australian Capital Territory in 2012 to 2013.
As noted above, all charges were withdrawn against a fifth individual in the Vina Money case who was contesting the charges.
ACCC focussing on ‘attempt to induce’ cartel cases
A review of recent cartel cases commenced by the ACCC are suggestive of a trend of the ACCC in focusing on alleging “attempts” or “attempts to induce” cartel conduct, such as in the ongoing case of Qteq and recent successful outcomes in ARM Architecture (conduct admitted) and Delta Building Automation (conduct contested). This new focus on attempts to induce has occurred in the context of the first instance decision in BlueScope where the Federal Court upheld the ACCC’s ‘attempt to induce’ allegations (case on appeal).
Ongoing trend of increasing penalties
There is a clear trajectory towards the higher penalties being sought by the ACCC and the increasing willingness of the Courts to impose such penalties for contravenctions of the CCA including for cartel conduct. Reforms in late 2022 to increase the maximum civil penalties for anticompetitive conduct will assist in this regard, although the new maximums are more likely to have relevance for very large companies. In addition, the decision in Australian Building & Construction Commissioner v Pattinson [2002] HCA 13) may also drive this trend, as the High Court found that while a civil penalty must be no more than what might be reasonably necessary to deter further conduct, it need not be proportionate to the seriousness of the conduct, such that the maximum penalty does not need to be reserved for the most serious conduct.
26. What are the key expected developments over the next 12 months (e.g. imminent statutory changes, procedural changes, upcoming decisions, etc.)?
At the time of writing, there are no proposed reforms which will impact existing cartel laws in the next 12 months. However, the Federal Government is currently undertaking a review of Australia’s competition laws which, among other things, is examining the regulation of non-compete clauses in employment contracts (which currently sit outside the purview of the CCA). It is possible that there will reforms to the CCA to prohibit or restrict the use of non-compete clauses in employment contracts as a result of this review.
Civil cases
In addition to the appeals lodged by BlueScope and a former employee which expected to be heard later in 2024 (see Section 24), there are several other civil cartel cases currently before the Courts.
In August 2023, the Federal Court found that Delta Building Automation Pty Ltd and its sole director attempted to rig a bid in connection with a tender conducted by the National Gallery of Australia in Canberra in late 2019. The tender related to the replacement and ongoing maintenance of a building management system at the gallery. The Federal Court found that the sole director, offered to pay a competitor in exchange for agreeing to rig the bid for the tender. Notably, the competitor rejected the approach, and the National Gallery did not suffer any loss as a result. A hearing to determine penalties and other orders has occurred and judgment is pending.
In December 2022, the ACCC commenced proceedings against Qteq Pty Ltd, a mining equipment and technology services company and its executive Chairman, alleging seven instances where Qteq contacted competing businesses who supply services to the oil and gas industry and attempted to induce them to enter into cartel arrangements involving output restrictions, market sharing and rigging a tender. The hearing on liability occurred in March 2024 and judgment is pending.
Criminal prosecutions
The only remaining criminal cartel case currently s before the Federal Court is the appeal by Aussie Skips in respect of the A$3.5m fine imposed by the Federal Court in February 2024 for colluding to fix prices with its competitor, Bingo Industries. The appeal is in the early stages.