Presently, civil action is the only means of enforcing cartel behavior in Australia. The Australian Competition & Consumer Commission (ACCC) may initiate a civil proceeding against corporations or individuals engaging in cartel conduct. For corporations, the maximum civil penalty is the greater of AU$10 million, three times the value of the illegal benefit or 10 percent of the companies’ annual turnover. Individuals may be assessed up to AU$500,000 in civil sanctions. Moreover, private parties may file suit against the cartel participants for damages.
After the order of record penalties of AU$36 million against Visy Board Pty Ltd by the Federal Court in November 2007, the ACCC emphasized the need for Australia to punish cartel behavior criminally. The United States, Canada and the United Kingdom all have criminal penalty regimes for cartel behavior, which include not only fines but also imprisonment.
The Trade Practices Amendment (Cartel Conduct and Other Measures) 2008, introduced on December 2, 2008 by Minister for Competition Policy and Consumer Affairs Chris Bowen, provides for criminal sanctions. The bill will impose a maximum sentence of 10 years in prison and/or a fine of AU$220,000 for individuals engaging in serious cartel conduct. Corporations will receive a maximum fine of AU$10 million or three times the value of the illegal benefit.
If passed, the Commonwealth Director of Public Prosecutions (DDP) will prosecute criminal cartel behavior, while the ACCC will be limited to investigating the cartel conduct and gathering evidence. Foreshadowing the approval of the Trade Practices Amendment, the ACCC and DDP have already entered into a Memorandum of Understanding (MOU) that defines each party’s roles under the proposed legislation. The ACCC will continue to enforce cartel behavior civilly and will administer the immunity process for both civil and criminal conduct. However, the decision whether to grant criminal immunity will ultimately rest with the DDP upon recommendation by the ACCC. The MOU will go into effect after the Trade Practice Amendment receives royal assent. The Senate Economics Committee will issue a report by February 20, 2009.