From the price-fixing scandal of the Visy-Amcor ‘cardboard cartel’ to multiple-airline collusion over air cargo costs, the past decade has read like a thrilling tale of market misconduct.

Competition cases brought before Australia’s Federal Court share the hallmarks of conspiracy, collusion and a treasure trove that amasses from secret deals between otherwise fierce competitors. Given the global nature of modern-day business, a dash of international intrigue is increasingly added to the mix.

Prosecuting unfair riches

Maddocks litigation partner Shaun Temby has acted for and against the Australian Competition and Consumer Commission (ACCC) over the course of a 20-year career. He predicts an uptick in cross-border cartel crackdowns.

“In the last few years, we’ve seen increasing opportunities between Australian and other national competition agencies through bi-lateral agreements and the International Competition Network, which has led to greater investigation and prosecution of cross-border cartels,” Mr Temby says.

Australia is a member of the International Competition Network, which seeks to encourage and assist cooperation between global competition law agencies through the sharing of information and the coordination of enforcement activity.

Mr Temby suggested a cross-border approach is crucial for effective market regulation.

“The whole point of price-fixing and market-sharing is to obtain the benefit of prices greater than those which would be obtained in a competitive market,” he says.

“If one country’s competition regulator is tipped off about anticompetitive conduct in its jurisdiction, it’s often the case that that behaviour is replicated in other jurisdictions.”

Competition law is a practice area that applies to businesses in every market. Giant national and multinational companies with interests across several markets have a feast of options to consider – but also face pitfalls at every turn.

For competition lawyers, this makes for fascinating work on matters of growing complexity. It also calls for more seats at the table for business takeover deals in particular.

Under Australia’s regulatory framework, ACCC clearance must be given before a company can sink its teeth into an acquisition that will give it a substantial chunk of market share.

Gilbert + Tobin competition partner Luke Woodward is involved in one of Australia’s most complex acquisitions. He is advising Qube, one of a number of companies to form a consortium that has put forward a $9.05 billion bid for Australian transport giant Asciano.

“It has been a complex matter and the ability to advise in the way that is needed rests on the fact that we’ve been doing work for them over a period of time. We still have a little way to go to get an ACCC clearance,” Mr Woodward says.

“Transactions like Asciano are unusual because there are different consortium parties that raise their own competition issues.

“It really requires a detailed understanding of the client business. The reality of these large scale transactions in complex markets is that they do rest on nitty-gritty analysis and that has always been the case.”

Mr Woodward has been advising Qube on complex competition matters, including successful merger clearances, since 2007. This work has been important to allow the company to achieve substantial growth and diversify. Last year, Qube, a leading land transporter, saw an opportunity to acquire its ‘golden egg’ – the Asciano container terminal operations.

“By 2015, Qube was a leading import/export logistics operator but didn’t have a container terminal operation. We were advising them so as to avoid the competition issues in a number of areas where the company was a competitor to Asciano,” Mr Woodward says.

“Any acquisition needed to be carefully thought through to ensure that we were only acquiring parts of the business that didn’t raise competition problems and solutions to acquire the rest.”

A solution to address competition concerns came in the form of a consortium of international players, which has since bid for Asciano’s three main businesses: container terminals at each major Australian port (Patrick container terminal business), a national rail business (Pacific National), and Bulk and Automotive Port Services (BAPS).

Of these businesses, Qube hopes to jointly acquire the Patrick container terminal business and hold rights to buy out a 50 per cent stake in the Australian Amalgamated Terminals business.

The deal has involved engagement with various regulators, including ASIC, FIRB and the ASX. An ACCC decision about the proposed cross-ownership deal was expected in late May.

Asciano is a unique example of the competition smorgasbord that mega-deals can offer and the regulatory clearance challenges they present. However, the relevance of competition law is not driven by mega-deals. Increased enforcement in consumer areas and the introduction of penalties are the magic beans that offer fertile grounds for growth in competition law.

“It’s certainly a bigger area of practice today, and we have seen more law firms working in this area,” Mr Woodward says.

“As industries consolidate around the world, we’re seeing more mergers that require tricky approvals from multiple jurisdictions.

“Just about every country now has a robust competition law and an active enforcement agency focused on the impact of the deal on that country. It’s important to find a solution that allows the deal to go ahead but preserves competition in all these different areas,” he adds.

Rumblings from the top

Recommendations from the Harper Panel Final Report were published in March last year following a government review of Australian competition law. Matt Rubinstein was one of Gilbert + Tobin’s key advisers to the Business Council of Australia for the Review.

It took the government most of last year to formally respond to 55 of the overall recommendations.

“Of most interest to competition lawyers is the issue of the s.46 misuse of market power, which has had most of the light and heat of the debate,” Mr Rubinstein says.

“Other recommendations were also very important, such as the merger process which will become more streamlined and consolidated. We are waiting to see how the recommendations that were accepted will be translated into draft legislation. It will certainly be an exciting year in competition law.”

Mr Woodward adds that practitioners sat in a ‘wait and see situation’ and that the timing of the changes would largely depend on the date of the next federal election.

“We’ve got back the policy response, a lot of that will be clear regarding what the legislative changes will be. In some other areas, we’ll have to look at the detail of that,” he says.

According to Ashurst competition practice head Bill Reid, overall competition law reforms are likely to be embraced.

“Removing the per se prohibition on ‘third line forcing’, amending the cartel laws to provide for a clearer ‘joint venture’ exception and simplifying authorisations processes will be widely welcomed by both the business community and the ACCC,” Mr Reid says.

Other reforms, however, are more controversial and uncertainty remains over their implementation and enforcement.

“Among these will be the new rules to be introduced in relation to ‘concerted practices’. It is proposed to extend section 45 of the CCA to prohibit engaging in a ‘concerted practice’ (undefined), with the purpose or likely effect of substantially lessening competition.”

The implications of government reform for Australia’s competition law landscape remain unknown, but the well-versed practitioners foresee ongoing debate over the likely impact of the proposed new regulation.