WHAT IS A CARTEL CRIMINALISATION?
Amendments to the Commerce Act make it a criminal offence to intentionally engage in price fixing, restricting output or allocating markets. The offence carries penalties of:
- Individuals: Up to 7 years imprisonment for individuals or a fine of up to $500,000, or both.
- Corporates: A fine of up to $10 million or a higher penalty based on commercial gain from the cartel arrangement or the person’s turnover.
The government's reasons for criminalising cartel conduct include bringing our cartel law regime in line with key trading partners and promoting detection and deterrence of cartel behaviour.
WHO DOES THE NEW OFFENCE AFFECT?
Most people think of cartels as only affecting “big, bad” business (and Columbian drug smugglers!) but this is wrong. Cartel laws do not discriminate between large, well- resourced corporate entities and small “mum and dad” businesses. Cartel laws apply to any business that enters into an agreement or arrangement with a competitor.
WHAT ARE CARTEL LAWS?
Under the Commerce Act it is unlawful for a business agreement or arrangement between competitors to include a “cartel” clause unless one of the Commerce Act exemptions apply. A “cartel” in the general sense refers to an association of competing businesses designed to limit competition or control prices. This is broadly what the cartel rules seek to prohibit. In a nutshell, arrangements between competitors are illegal where competitors are:
- fixing prices;
- allocating markets; or
- restricting output.