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Cartel conduct casts new doubts

Cartel conduct casts new doubts

The best advice available to companies following the criminalisation of cartel conduct last week is to make sure they have their "houses in order"._x000D_ _x000D_

The best advice available to companies following the criminalisation of cartel conduct last week is to make sure they have their “houses in order”.

While there is some ambiguity in the legislation surrounding the determination of what conduct is criminal and what is not, Deacons partner and specialist competition law litigator Calum Henderson said it was up to the ACCC and DPP to iron out those uncertainties. 

Meanwhile, law firms would be working with clients to ensure their current arrangements met the requirements of the Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008.

Mallesons Stephen Jaques competition partner Lisa Huett agreed that the legislation had thrown up uncertainties about what was acceptable and what was unacceptable.

“There are slight differences in the way cartel conduct has been defined compared to how it was previously understood,” Huett said.

“Companies with arrangements in place that previously complied with the law will need to check in and make sure those arrangements are still alright. There have been no grandfathering arrangements for these new laws so existing arrangements could contravene the new civil and criminal offences.”

Informal joint ventures were an obvious example, Henderson said. 

“Some informal joint ventures, where there is no contract and no intention to enter into a formal contract, will fall within the scope of the act. 

“To get a joint venture exemption you need to have a contract, or at least have intended and believed you were entering into a contract,” he said.

And, while Henderson did not expect the ACCC to start prosecuting companies for minor breaches, he said “now more than ever” corporate counsels and senior executives had to proactively investigate any possible breaches within their companies.

“They need to find out whether there is anything illegal going on within their companies, rather than waiting until someone reports it.”

The other unknown factor, Huett said, was the way the ACCC and DPP would work together to bring criminal proceedings.

Huett said there would be a real need for the regulator to provide transparency on its policies and guidelines for prosecuting such cases.

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