Cartel Conduct – Do you really know what your staff are up to?

January, 2015

The Australian Competition Consumer Commission (ACCC) was successful in penalising Renegade Gas, Speed-E-Gas and three senior staff of those companies, for engaging in cartel conduct with respect to the supply of LPG cylinders for use in forklifts.

During the period between August 2006 and June 2011, three senior staff members of separate companies, Renegade Gas and Speed-E-Gas, mutually agreed to not actively poach one another’s customers, and if this occurred, to allow the other party to ‘poach back’ the original customer.  The ACCC successfully alleged the agreement contravened three sections under the Competition and Consumer Act 2010 that are aimed at prohibiting:

•    two competing parties from fixing, controlling or maintaining a price in relation to the supply of goods and services;
•    a company to give effect to cartel conduct through a contract, agreement or understanding; and
•    a corporation from entering into a contract or arrangement if the proposed contract, arrangement or understanding would, or likely would, substantially lessen competition.

Although noting Renegade Gas’ and Speed-E-Gas’ co-operated with the ACCC investigation, the ACCC imposed the following penalties:
    
•    Renegade Gas pay a pecuniary penalty of $4.8 million;
•    Speed-E-Gas pay a pecuniary penalty of $3.1 million;
•    Mr Berman, managing director of Renegade, personally pay a pecuniary penalty of $250,000;
•    Mr Smith, Sydney branch manager of Renegade, personally pay a pecuniary penalty of $100,000; and
•    Mr Wilson, former employee of Speed-E-Gas, personally pay a pecuniary penalty of $50,000.

These penalties were applied despite the behaviour in question being limited to a few employees, as opposed to being born from a company-wide policy or approach.

With this decision in mind, it is prudent to take note of the ACCC’s statement last week indicating its intentions to invest its $10 million windfall from its Coles victory into increased investigation and enforcement activity in relation to non-compliance with the Competition and Consumer Act..  

Contact Mills Oakley

For more information on the penalties associated with cartel conduct and how it may affect you, please contact:

tim-cox

Tim Cox | Partner
T: +61 7 3228 0442
E: tcox@millsoakley.com.au

 

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