Updated Immunity Policy To Uncover Cartel Conduct

Friday 12 September 2014 @ 9.04 a.m. | Legal Research | Trade & Commerce

The Australian Competition and Consumer Commission (ACCC) has published its updated Immunity and Cooperation Policy for Cartel Conduct.

The Chairman of the ACCC, Rod Sims said:

“Due to the difficulty in detecting cartels and the damage that cartels cause to competitors and consumers, identifying and prosecuting cartel conduct is an enduring priority for the commission … This immunity policy and the threat of civil and criminal penalties are fundamental to the effective discovery and disruption of cartel conduct.”

The ACCC regularly reviews the effectiveness of its immunity policy. Following targeted consultation in 2013 and early 2014, the ACCC has simplified the format of the policy.

Key Changes to the Policy

The policy incorporates the following key changes identified during consultation:

  • implementing a two-step process for the Commonwealth Director of Public Prosecutions (CDPP) to grant criminal immunity for cartel conduct where the CDPP will ordinarily issue a letter of comfort first, and subsequently provide an undertaking under the Director of Public Prosecutions Act 1983 (Cth);
  • removing “clear leader” as a disqualification for immunity; and
  • consolidating various publications into one policy document and a set of FAQs.

Under the policy, cartel participants may seek both civil and criminal immunity for cartel conduct. The ACCC is responsible for granting civil immunity, while the CDPP is responsible for granting criminal immunity. The ACCC works closely with the CDPP on applications for criminal immunity.

The CDPP’s approach to granting criminal immunity is set out in Annexure B to the Prosecution Policy of the Commonwealth. The CDPP published an updated Annexure B to the Prosecution Policy of the Commonwealth on 9 September 2014.

The ACCC Chairman said further:

“The ACCC’s partnership with CDPP is very important, and a successful cartel immunity program is a cornerstone in that partnership.”

... and Mr Robert Bromwich SC, commented:

“Cartel activity harms Australians and Australian businesses, and I look forward to continuing to work with Mr Sims and the ACCC to deter these crimes.”

The Immunity and Cooperation Policy for Cartel Conduct August 2014 and FAQs replace the ACCC Immunity Policy for Cartel Conduct July 2009 and ACCC Immunity Policy Interpretation Guidelines July 2009.

Powers of the ACCC

The ACCC has extensive powers to investigate cartels. It can compel anyone to provide information about a suspected breach of the law, and can seek search warrants from a magistrate and execute these upon company offices and the premises of company officers. The ACCC can also notify the Australian Federal Police who in certain circumstances can collect evidence using phone taps and other surveillance devices.

Since the introduction of the ACCC’s cartel immunity program, the ACCC has received over 150 approaches. In the period July 2009 to June 2014, the ACCC undertook 35 in-depth investigations that has resulted in five cartel matters currently before the court in relation to refrigerant gas, wire harnesses for vehicles, eggs, blenders, and laundry detergent.

Outcomes of Recent Federal Court Cases

Recent Federal Court judgments in cartel cases have included a penalty of $1.35 million against Japanese cable supplier Viscas Corporation in respect of bid rigging and price fixing conduct and penalties of $3 million against NSK Australia for its involvement in cartel conduct in relation to the price of bearings.

Individuals found guilty of cartel conduct could face criminal or civil penalties, including:

  • up to 10 years in jail and/or fines of up to $340,000 per criminal cartel offence; and
  • a pecuniary penalty of up to $500,000 per civil contravention.

For corporations, the maximum fine or pecuniary penalty for each criminal cartel offence or civil contravention (whichever applies) will be the greater of:

  • $10,000,000;
  • three times the total value of the benefits obtained by one or more persons and that are reasonably attributable to the offence or contravention; or
  • where benefits cannot be fully determined, 10 per cent of the annual turnover of the company (including related corporate bodies) in the preceding 12 months.

For more information see: Immunity and cooperation policy for cartel conduct, and Immunity and cooperation policy: frequently asked questions.

The Prosecution Policy of the Commonwealth is available on the CDPP website.

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Sources:

Updated Immunity Policy to uncover cartel conduct – ACCC Release MR 225/14

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