Criminal Cartels Australia: ACCC Investigative Powers

The mandate for fairer business practice in the area of competition led to a review by Professor Ian Harper (“The Harper Review”), commencing in 2014, to determine whether the legislation was still adequate given the economic changes that have occurred since the 1990s.1  This was the first Competition Policy Review in Australia in over 20 years.  In 2017, two bills were passed to implement long-needed reforms which came into operation on 6 November 2017.

The Harper Review recommended that: the power given to the ACCC under s 1552 should be ‘extended to cover the investigation of alleged contraventions of court-enforceable undertakings’3; that the amendment to s 155 of the CCA was to include a reasonable search defence to the contravention of ‘refusal or failure to comply with a notice’ issued by the ACCC;4 and the fine for non-compliance with a notice was to be increased.

 

Section 155 CCA changes

The CCA provides that the ACCC may issue a notice to obtain information, documents and evidence if the matter ‘constitutes, or may constitute a contravention of any of the terms of an undertaking under section 87B of this Act or under section 218 of the Australian Consumer law’.5

It is a contravention of the CCA to ‘refuse or fail to comply with a notice…’ given by the ACCC.6  In order for the defence to be available, the notice must relate to producing documents and the individual must prove that, after a reasonable search, they are not aware of the documents.7  Additionally, the person must provide a written response to the notice that includes a description of both the scope and limitations of the search.8  The defendant bears the onus of proof in determining whether a reasonable search has been conducted.9

In order to determine what constitutes a ‘reasonable search’, an additional provision was introduced by the Amendment Act to include, ‘the nature and complexity of the matter, the number of documents involved, the relative ease and cost of retrieving a document and any other relevant matter’.10  Although these factors provide a guide only, what constitutes ‘reasonable’ has intentionally been given a broad scope.11

A person who refuses or fails to comply with a notice from the ACCC ‘is guilty of an offence punishable…[by]…a fine not exceeding 100 penalty units’ ($21,000.00).12  If the defendant is a corporation, the fine may be a maximum of $105,000.00.13

Given the serious nature of non-compliance with compulsory evidence-gathering notices, the ACCC may also choose to refer the matter to the CDPP.14  If the CDPP elect to prosecute, a conviction for this offence is punishable by imprisonment for two years.15  Furthermore, ‘if a person refuses or fails to comply with a notice, a Court may, on application by the Commission, make an order directing the person to comply with the notice’.16

 

Conclusion

The implementation of the recommendations of The Harper Review has seen an overall increase in the ACCC powers and the enforcement procedures available for contraventions of the Act.

 

References

  1. Jones Day, ‘Changes to the ACCC’s Power to Obtain Information’ (February 2018) Australian & New Zealand Competition & Consumer Law Update, https://jonesday-ecommunications.com.
  2. Above n 1, s 155A.
  3. Commonwealth of Australia, ‘Competition Policy Review – Final Report’ (March 2015) 71.
  4. Above n 1, s 155(5)(a).
  5. Above n 1, s 155(2)(iii).
  6. Ibid., s 155(5)(a).
  7. Above n 1, s 155(5B).
  8. Ibid.
  9. Above n 15.
  10. Above n 1, s 155(6).
  11. Above n 4.
  12. Above n 1, s 155(6A).
  13. Above n 15.
  14. Ibid.
  15. Above n 1, s 155(6A).
  16. Ibid., s 155(8A).

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