1.12 Criminal penalties for serious cartel behaviour On 2 February 2005 it was announced that the Australian Government will amend the Trade Practices Act 1974 to introduce criminal penalties for serious cartel conduct. The Review of the Competition Provisions of the Trade Practices Act (the Dawson Review) recommended the introduction of criminal penalties for serious cartel conduct, recognising the growing international experience that suggests they are effective in deterring serious cartel conduct. However, the Dawson Review also indicated that a number of problems with the introduction of criminal penalties needed to be resolved before such penalties could be introduced. Principally, the problems identified in the Dawson Review centred on appropriately defining a criminal offence and implementing an effective leniency or immunity policy in the Australian context. The proposed criminal cartel offence will prohibit a person from making or giving effect to a contract, arrangement or understanding between competitors that contains a provision to fix prices, restrict output, divide markets or rig bids, trial the contract, arrangement or understanding is made or given effect to with the intention of dishonestly obtaining a gain from customers who fall victim to the cartel. To ensure the offence targets serious cartel conduct that causes large scale or significant economic harm, and that minor breaches are dealt with through civil rather than criminal proceedings, the DPP and the ACCC will enter into a formal, publicly available Memorandum of Understanding (MOU) establishing procedures for the investigation of the cartel offence and the circumstances in which the ACCC will refer a case to the DPP for prosecution. The MOU will also specify that in making an independent determination as to whether to prosecute a particular matter, the DPP will consider factors such as the impact of the cartel and the scale of detriment caused to consumers and the public, and previous admissions to or convictions for cartel conduct. The ACCC will issue guidelines, prepared in consultation with the DPP, to outline the factors that will inform any decision to pursue a criminal investigation.
1.12 Criminal penalties for serious cartel behaviour On 2 February 2005 it was announced that the Australian Government will amend the Trade Practices Act 1974 to introduce criminal penalties for serious cartel conduct. The Review of the Competition Provisions of the Trade Practices Act (the Dawson Review) recommended the introduction of criminal penalties for serious cartel conduct, recognising the growing international experience that suggests they are effective in deterring serious cartel conduct. However, the Dawson Review also indicated that a number of problems with the introduction of criminal penalties needed to be resolved before such penalties could be introduced. Principally, the problems identified in the Dawson Review centred on appropriately defining a criminal offence and implementing an effective leniency or immunity policy in the Australian context. The proposed criminal cartel offence will prohibit a person from making or giving effect to a contract, arrangement or understanding between competitors that contains a provision to fix prices, restrict output, divide markets or rig bids, the contract, arrangement or understanding is made or given effect to with the intention of dishonestly obtaining a gain from customers who fall victim to the cartel. To ensure the offence targets serious cartel conduct that causes large scale or significant economic harm, and that minor breaches are dealt with through civil rather than criminal proceedings, the DPP and the ACCC will enter into a formal, publicly available Memorandum of Understanding (MOU) establishing procedures for the investigation of the cartel offence and the circumstances in which the ACCC will refer a case to the DPP for prosecution. The MOU will also specify that in making an independent determination as to whether to prosecute a particular matter, the DPP will consider factors such as the impact of the cartel and the scale of detriment caused to consumers and the public, and previous admissions to or convictions for cartel conduct. The ACCC will issue guidelines, prepared in consultation with the DPP, to outline the factors that will inform any decision to pursue a criminal investigation. trial
CORPORATE-LAW-ELECTRONIC-BULLETIN-February-2005.docx