A Japanese shipping company has plead guilty in the first criminal price fixing prosecution by the Australian Competition and Consumer Commission (ACCC). Other companies still are under investigation in the same case. This first criminal prosecution will mark a new trend in competition law enforcement in Australia, but leaves some questions unanswered.
Australia has had a civil penalty regime since 1974, under which individuals have paid fines of up to a $1 million. But since the criminalization of "hard core" competition law conduct seven years ago, there have not yet been any criminal prosecutions. "Hard core" conduct in Australia includes competitor agreements to fix prices, limit capacity or output, share markets, and rig bids.
Although this first criminal defendant is a company that acknowledged its guilt, the case will be an important test for the criminal justice system. For the first time the Commonwealth Director of Public Prosecutions is responsible for prosecuting an antitrust case, and for the first time the Federal Court system (whose cases predominantly involve commercial and administrative law disputes) is confronted with criminal competition law enforcement.
Even after this case, important aspects of the criminal cartel enforcement system will remain un-tested. Only when an accused individual denies wrongdoing will the following key issues be tested: the efficacy of the ACCC's criminal investigation techniques; respect for human rights (e.g., the right to silence); proof at a criminal standard; and the interpretation of a dozen pages of complex drafting that defines the hard core offenses. Only when an individual is convicted will it become apparent whether the Court has an appetite for a custodial or non-custodial sentence and of what duration. Another test will be how the Court approaches a request to convict an accused at a criminal standard based primarily on a leniency applicant's evidence.
The ACCC must in the future decide whether more usually to pursue hard core cases on civil or criminal enforcement tracks. It is not surprising that there has been a delay in the first criminal case, because if the ACCC has wanted to take action against the totality of anticompetitive conduct lasting several years, civil enforcement was still the only option even after the date the criminal laws took effect. Although the ACCC likely will prefer the criminal track where possible, a number of complications will continue to drive matters back towards civil enforcement. For example, competition law cases often involve a mixture of both hard core elements and other anticompetitive conduct that amounts only to a civil wrong. In some hard core cases, the ACCC may only be able to uncover the necessary evidence by denying potential accused the right to silence, in which case a civil fine remains the only enforcement option. Addressing all the illegal conduct would need to be balanced with the costs and complication of running parallel criminal and civil processes.