Thursday, October 9, 2008

Cartel Enforcement in Australia

Posted by D. Daniel Sokol

Bob Baxt (Freehills) & Gillian McKenzie (Freehills) give us an update of Cartel Enforcement in Australia.

ABSTRACT: Historically cartel behavior in Australia has been subject to a civil penalty regime under the Trade Practices Act 1974 (“the Act”). Since the 1974 enactment of the legislation, price fixing and similar anticompetitive contracts, arrangements, or understandings have been treated as per se illegal under the Act. However, the penalties for breaching these provisions were historically quite low until 2007 when the civil penalties were increased significantly. There is now a very determined effort on the part of the new Federal Labor Government to introduce criminal sanctions against serious cartels and to bring Australia in line with the developments in the U.S., Canada and in other countries.

The relevant regulator, the Australian Competition and Consumer Commission (“ACCC”), has actively pursued stronger enforcement powers and harsher sanctions to address cartel conduct. Graeme Samuel, Chairman of the ACCC, once described cartels as a ‘cancer on our economy’, stealing ‘billions of dollars…from business, from taxpayers and ultimately from…consumers’.

This paper considers both the existing civil regime for enforcing prohibitions on cartel behavior, as well as noting certain aspects of the foreshadowed criminal sanctions.

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