Plea in ACCC's first ever criminal cartel case

15 August 2016

Following an Australian Competition and Consumer Commission (ACCC) investigation into vehicle freight charges by shipping companies, on 18 July 2016 Nippon Yusen Kabushiki Kaisha pleaded guilty to criminal cartel conduct, to charges that had been formally laid on 14 July 2016. This is the first criminal prosecution of a cartel matter in Australia since the criminal cartel offence provisions were first added to the then Trade Practices Act in 2009. The fact that this is Australia’s first ever criminal cartel matter means that it is the subject of significant interest across the Australian legal and enforcement communities. The Federal Court has even had to publish new rules and forms in order to be able to hear the case as its first indictable matter.

Under Australian criminal law, unlike in the United States or in Australian civil proceedings, it is not possible for the parties to criminal proceedings to agree on a fine to be imposed1. The court will therefore impose the first criminal fine by reference to general sentencing principles. The maximum fine that could be imposed will be the greatest of:

  • $10 million;
  • Three times the benefits obtained; or
  • If the benefits cannot be established, 10% of the defendant’s annual Australian connected turnover.

The matter has been adjourned to 12 September 2016. The ACCC has indicated that it is continuing its investigations into other alleged cartel participants.

Although this is the ACCC’s first criminal prosecution, it is unlikely to be the last. The ACCC’s Chairman, Rod Sims, was quoted in the Australian Financial Review on 19 July as saying: “We have 10 to 12 detailed investigations under way and we’re trying to lay the platform for a continuing stream of criminal cartels.”

It remains to be seen what other targets the ACCC has on its radar.

This article was written by Ailbhe Kirrane, Partner and Jonathan Tapp, Partner.

1 In Australia in civil penalty proceedings the regulator and the defendant can agree a penalty for the purposes of joint submissions; the Court must still satisfy itself that the submitted penalty is appropriate.

Subscribe to HWL Ebsworth Publications and Events

HWL Ebsworth regularly publishes articles and newsletters to keep our clients up to date on the latest legal developments and what this means for your business.

To receive these updates via email, please complete the subscription form and indicate which areas of law you would like to receive information on.

Contact us