The Australian Competition and Consumer Commission’s (ACCC’s) cartel crackdown was handed a severe blow when a Federal Court judge dismissed allegations of price fixing in the Geelong petrol market.
Although the respondents communicated about petrol prices, the ACCC failed to prove that the communications amounted to an ‘arrangement or understanding’ as required by the Trade Practices Act. The Federal Court judge opined:
Not only did the evidence led by the ACCC fail to prove the existence of such arrangements or understandings … but the preponderance of the evidence suggests that no such arrangements or understandings existed.’
Courts are treating the requirement to establish an ‘arrangement or understanding’ stringently. The US Supreme Court has recently considered similar issues.
In addition, the Federal Court decision may have implications for the ACCC’s immunity and cooperation policies. The judge found that the court ‘can (and perhaps should) decline to act on admissions when there is ‘reason to doubt their correctness’’, and in this case, the ‘hope of securing leniency’ provided a powerful incentive to make admissions. The judge then discounted a respondent’s admissions in a statement signed pursuant to a leniency agreement with the ACCC, because conflicting evidence ‘given in his own words’ from the stand was ‘more reliable than the words negotiated between his lawyers and those acting for the ACCC’.
This case is sure to have implications for future cartel prosecutions, most notably the ongoing ACCC case against Richard Pratt and Visy.
More information
For information regarding possible implications for your business, contact a member of the Competition & Market Regulation team.