It is not just large companies that face higher penalties for breaching Australia’s competition and consumer laws under recent changes to the Competition & Consumer Act, warns RMB Lawyers Special Counsel STEVEN BURNS:
Contraventions of the Competition & Consumer Act, which already attracted substantial fines and possible imprisonment for individuals breaching the criminal cartel provisions, have seen maximum penalties increased from $10 million to the greater of $50 million or three times the value derived from the relevant breach. If that cannot be determined, the fine could be 30% of the company’s turnover during the period it engaged in the conduct.
These penalties apply to a range of offences including unconscionable conduct, false or misleading representations and supplying products that do not comply with safety or information standards and more.
It is important to note that the ACCC does not just investigate and take enforcement action against large corporates or multi nationals.
In recent months the ACCC has obtained substantial penalties against companies that aren’t from the big end of town. In mid-September the Federal Court ordered two Sydney roofing companies and their directors each pay penalties of $420,000 for engaging in cartel conduct. After an ACC investigation, the businesses admitted they had got together in responding to a tender to make it more likely that one business would succeed than the other.
In November the Federal Court ordered a regional Queensland company based in Mackay pay a penalty of $1 million after finding it had entered into an anti-competitive agreement with a competitor. The agreement was described as a “distributorship” agreement signed in August 2016 where the competitors agreed to cooperate in servicing overhead cranes in parts of Queensland and Newcastle.
Commenting on the orders, ACCC Commissioner, Liza Carver, said: “Businesses are reminded that the ACCC will investigate and take appropriate enforcement action not just against large corporates or multi-nationals.”
The first criminal prosecution for alleged breaches of the cartel provisions of the Act was brought against a regional mum and dad business in Mildura, although ultimately the company and its managing director were found not guilty in June 2021 after a jury trial that lasted for three months. However, that showed no business is safe from investigation and possible prosecution.
Businesses need to know their obligations under the Competition & Consumer Act and have in place programs to ensure they are compliant. RMB can assist you to prepare a properly documented compliance program tailored for your business. Your first step should be to contact our office to arrange a free consultation. You can contact us by by phone or our 'Ask a Question' tool on our website. It costs nothing to ask us about your rights.