In the 2013-2014 financial year, the Federal Court heard twenty-eight matters brought by the Australian Competition and Consumer Commission (ACCC). The ACCC boasted a success rate of 100% – that’s better than Rhonda Rousey’s record after her Melbourne UFC defeat. The ACCC secured just over $12 million in penalties plus $220,000 in infringement notices. So the question remains – how has our thwarter of cartels and anti-competitive conduct fared in 2015?
Cartels
Cartel behaviour involves businesses conspiring with one another to rig bids, fix prices or share markets to increase profits. It’s like the prisoner’s dilemma, except everyone makes the right choice. In 2014-15, the ACCC took a number of prisoners to court.
Renegade Gas and Speed-E-Gas
Renegade and Speed agreed not to supply LPG cylinders for forklifts to one another’s clients. Renegade and Speed agreed:
1. Not to approach one another’s customers;
2. Declined to provide to the other’s customers; and
3. Where Renegade or Speed supplied gas, managed their response so that the client only sought to purchase the amount of gas lost from the other.
The Federal Court ordered penalties totalling $8.3 million.
Olex Australia, Prysmian Power Cables, et others
The ACCC instigated proceedings against Olex, Prysmian and others for bid rigging and price fixing. Olex and Prysmian supplied electrical cables and the ACCC alleged that they conspired to fix prices. Given the high number of users of electrical cable, this is huge. The case is still ongoing.
Air New Zealand and PT Garuda
Indonesian airline, Garuda, was banned from flying in Europe in 2007. Travellers having flown with this airline may attest to its relaxed safety standards. But Air New Zealand? The ACCC alleges that these two colluded in fixing the price of surcharges applied to air cargo services that they supplied between 2001 and 2006. The case is ongoing.
Cascade Coal
Saving the best till last: allegations of cartel conduct just aren’t the same without an Obeid finger-in-the-pie. Cascade Coal agreed with Loyal, Buffalo and other mining companies that Loyal would withdraw its tender for the NSW Government’s Mount Penny coal exploration licence. In return, Cascade would grant Buffalo a 25% interest in its mining venture. Buffalo sold its interest to a company called Southeast Investments, which sold the interest again for $60 million. $30 million went to beneficiaries of the Obeid Family Trust No 2 (beneficiaries included Moses and Paul). Loyal, Buffalo and Southeast Investments were all companies associated with the Obeids.
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Other cases of note include:
- ACCC v CFMEU (secondary boycott and undue harassment and coercion);
- ACCC v Colgate-Palmolive Pty Ltd (and Cussons and Woolworths) (cartel conduct); and
- ACCC v Informed Sources (reaching an agreement with the effect or likely effect of substantially lessening competition).
The ACCC has taken some big fish to court, and we award at least 12/10 for landing the Obeids where they belong.
The ACCC’s actions in 2014-2015 demonstrate that significant penalties exist for engaging in anti-competitive conduct in Australia and companies tempted to collude should beware.
Questions? Please get in touch on 1300 544 755.