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ACCC issues cartel conduct warning

ACCC issues cartel conduct warning

Lawyers have been warned that the Australian Competition & Consumer Commission (ACCC) will pursue criminal charges over civil penalties for serious cartel conduct At the Competition Law…

Lawyers have been warned that the Australian Competition & Consumer Commission (ACCC) will pursue criminal charges over civil penalties for serious cartel conduct

At the Competition Law Conference last week, Marcus Bezzi, the executive general manager of the enforcement and compliance division at the ACCC, said that serious cartel conduct would involve the potential to cause large -scale or serious economic harm and it would be in the public interest to pursue a criminal remedy.

"For the legal representatives of people who are being investigated, this means there will be no point trying to negotiate resolution of a serious cartel matter in the way that may have been done when civil proceedings were the only available option," he said.

"We will never allow the prospect of a criminal prosecution to be traded away by an attractive offer to resolve the matter through civil penalty proceedings and the payment of a large penalty."

Bezzi said the ACCC had been vocal in supporting the criminalisation of cartel conduct because of its value as a deterrent.

"Whereas pecuniary penalties, no matter how large, may be regarded by some as merely a business cost, the risk of imprisonment alters the equation completely. No price can be given to the loss of one's liberty and a conviction is a permanent stain on anyone's resume," he said.

The Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008 criminalises cartel conduct including price-fixing, restricting outputs in production or supply chain, allocating customers, suppliers or territories and bid-rigging. Individuals can face up to ten years imprisonment for breaches of the offences.

When considering criminal sanctions, the Prosecution Policy of the Commonwealth will be consulted.This sets out factors including the impact of the cartel on the market, the scale of the detriment caused to consumers and whether members have previously been involved in criminal or civil breaches of cartel behaviour.

Bezzi emphasised that it was wise to get legal advice on agreements, arrangements or understanding involving competitors. "Because imprisonment could be the consequence of bad advice it is very important that any legal advice is correct," he said.

- Sarah Sharples

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