The greatest investigative challenge that the ACCC continues to confront is that cartel conduct is usually conducted covertly. Corporations attempt to hide their wrongdoings in order to retain the profits that they have made through their illegal conduct.
Imposing an appropriately deterrent financial penalty also remains an enforcement challenge. The ACCC has indicated that many penalties imposed on corporations fail to consider the size of the corporation. This is supported by independent research conducted by the Organisation for Economic Co-operation and Development (“OECD”). Overall, the maximum fines imposed in the Australian jurisdiction are significantly lower in comparable jurisdictions.
An important development in the investigation of criminal cartels that operate in covert ways is detecting digital collusion through algorithms. Digital collusion through mechanisms such as pricing algorithms, as well as advancing technology to prevent and detect digital collusion, are some of the issues faced by regulators. Experts are divided in their views about the degree to which artificial intelligence and algorithms pose threats to competition and whether appropriate legislation can address these risks.
Key issues in relation to investigation and decision-making procedures
While the covert actions of corporate cartels create challenges for investigations and enforcement, this also affects decisions concerning whether to prosecute individuals and corporations. The ACCC is unable to recommend corporations to the CDPP for prosecution unless they have enough evidence to do so.
The ACCC refers any serious breach of CCA legislation for prosecution wherever possible.
On 15 August 2014, the ACCC and CDPP signed a Memorandum of Understanding (“MOU”) regarding serious cartel conduct and the CDPP is responsible for prosecuting offences against Commonwealth law. The MOU states that conduct is deemed to be “serious” if one or more of the following apply:
- the conduct was covert;
- the conduct caused, or could have caused, large-scale or serious economic harm;
- the conduct was longstanding, or had a significant impact on the mark;
- the conduct caused or could have caused significant detriment to the public;
- one or more of the alleged participants has previously been found by a Court to have participated in either criminal or civil cartel conduct;
- senior representatives within the relevant corporation(s) were involved in authorising or participating in the conduct;
- the government and, thus, taxpayers were victims of the conduct; and/or
- the conduct involved the obstruction of justice or other collateral crimes committed in connection with the cartel.