Cartels in Australia: Civil Penalties and Sanctions

Australian legislation stipulates there are two types of contravention in relation to cartel conduct.  The first is the making of a contract, arrangement or understanding that contains a cartel provision.1  The second is giving effect to such provision.2  As penalties are determined for each contravention, significant fines can be imposed if the cartel conduct occurred over a long period of time.  The CCA specifies the maximum pecuniary penalty that can be incurred per offence is the greater of the following:

  1. AUD$10 million;
  2. three times the benefits attributable to the offence; or
  3. if the benefits cannot be attributed, 10% of the corporation’s annual turnover in the 12 months preceding the offence.3

Additionally, individuals who knowingly participate in cartel conduct are liable for pecuniary penalties of up to $500,000.  Aside from pecuniary penalties, the Court can also impose injunctions, probation orders, community service orders, adverse publicity orders and orders that exclude individual eligibility for company management.

While there are no official sentencing guidelines for cartel conduct, the Court is likely to consider similar factors addressed by Wigney J in the case of NYK.

 

Right of appeal against civil liability and penalties

As with most single judge decisions, individuals and corporations are afforded the right of Appeal.  Flight Centre was seen to utilise this right a number of times, appealing to the High Court of Australia.4  Cartel-related matters are heard by a single judge from the Federal Court of Australia.  If an Appeal is lodged, the case will be re-heard in front of the Full Court of the Federal Court of Australia.  The Full Federal Court has three or more sitting judges at any time.  As seen in Flight Centre, further Appeals can only occur when the High Court of Australia grants leave.5  Further to an Appeal on liability, defendant’s also have a right to Appeal against the penalty imposed.  Once again, Flight Centre utilised this process.6

 

References

  1. Above n 1, s 45AF.
  2. Ibid., s 45AG.
  3. Above n 1, s 45AG(3).
  4. Above n 37.
  5. Ibid.
  6. Ibid.

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