A Japanese shipping company has plead guilty in the first
criminal price fixing prosecution by the Australian Competition and
Consumer Commission (ACCC). Other companies still are under
investigation in the same case. This first criminal prosecution
will mark a new trend in competition law enforcement in Australia,
but leaves some questions unanswered.
Australia has had a civil penalty regime since 1974, under which
individuals have paid fines of up to a $1million. But since the
criminalization of "hard core" competition law conduct
seven years ago, there have not yet been any criminal prosecutions.
"Hard core" conduct in Australia includes competitor
agreements to fix prices, limit capacity or output, share markets,
and rig bids.
Although this first criminal defendant is a company that
acknowledged its guilt, the case will be an important test for the
criminal justice system. For the first time the Commonwealth
Director of Public Prosecutions is responsible for prosecuting an
antitrust case, and for the first time the Federal Court system
(whose cases predominantly involve commercial and administrative
law disputes) is confronted with criminal competition law
enforcement.
Even after this case, important aspects of the criminal cartel
enforcement system will remain un-tested. Only when an accused
individual denies wrongdoing will the following key issues be
tested: the efficacy of the ACCC's criminal investigation
techniques; respect for human rights (e.g., the right to silence);
proof at a criminal standard; and the interpretation of a dozen
pages of complex drafting that defines the hard core offenses. Only
when an individual is convicted will it become apparent whether the
Court has an appetite for a custodial or non-custodial sentence and
of what duration. Another test will be how the Court approaches a
request to convict an accused at a criminal standard based
primarily on a leniency applicant's evidence.
The ACCC must in the future decide whether more usually to pursue
hard core cases on civil or criminal enforcement tracks. It is not
surprising that there has been a delay in the first criminal case,
because if the ACCC has wanted to take action against the totality
of anticompetitive conduct lasting several years, civil enforcement
was still the only option even after the date the criminal laws
took effect. Although the ACCC likely will prefer the criminal
track where possible, a number of complications will continue to
drive matters back towards civil enforcement. For example,
competition law cases often involve a mixture of both hard core
elements and other anticompetitive conduct that amounts only to a
civil wrong. In some hard core cases, the ACCC may only be able to
uncover the necessary evidence by denying potential accused the
right to silence, in which case a civil fine remains the only
enforcement option. Addressing all the illegal conduct would need
to be balanced with the costs and complication of running parallel
criminal and civil processes.
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