The competition regulator has confirmed that it is working on its first cartel prosecutions in years, warning that price fixing can attract a maximum punishment of 10 years’ jail.
Australian Competition and Consumer Commission chairman Rod Sims says “business does need to be on notice that there are criminal sanctions attached to cartels, that we are actively searching for a case and have our immunity policy, which means that anybody engaged in a cartel needs to be looking over their shoulder.”
Sims told the Australian Financial Review that the ACCC has some “promising investigations under way”, and was particularly interested in price fixing for Government contracts.
“Nobody, even a regulator, wants to be putting people in jail. You get no satisfaction from that,” Sims told the paper.
“But a cartel is effectively appropriating money to the people in the cartel from the rest of the community. It is the clearest form on consumer detriment and if that is what it takes, then that is what we are going to have to do.”
In 2009, the Federal Government legislated that company executives found guilty of price fixing and other cartel offences could face jail terms of up to 10 years and/or fines of up to $220,000 per criminal cartel offence.
There are also pecuniary penalties of up to $500,000 per civil contravention.
Under the laws, it is illegal for a corporation to indemify its officers against legal costs and any financial penalty.
The Government also handed much stronger powers to the ACCC to uncover price fixing and collusion.
The ACCC says the maximum fine or pecuniary penalty for each criminal cartel offence or civil contravention will be the greater of: $10 million, 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 10% of the company’s annual turnover over the preceding 12 months.
Other penalties include injunctions, disqualification from managing corporations and community service orders.
Smart Company is the leading online publication in Australia for free news, information and resources catering to Australia’s entrepreneurs, small and medium business owners and business managers.
