Case: Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd (2004) ATPR 41-993
Outcome: cited
The fact that the Commission and the respondents have proffered a penalty agreed as between themselves is relevant, although not of course conclusive, since the responsibility of imposing penalties is conferred by the Trade Practices Act on the Court: see generally Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd (2004) ATPR 41-993. 306 Cartel behaviour of the kind with which this case is concerned is extremely destructive of the competition on which the prosperity of a free market economy depends. Often the profits can be immense, and the risk of detection slight. Of its nature, cartel behaviour is likely to occur in secret and between parties who seek mutual benefit. In the present case, detection occurred purely by chance when Amcor's solicitors, in the course of quite unrelated litigation, stumbled across incriminating material. Even then the present resolution may not have been reached were it not for two additional factors. First, the Commission's immunity policy and, secondly, the fact that there were not only witnesses prepared to give evidence, but also tape recordings of damning conversations. 307 The progressive increase in the maximum penalties mentioned above shows how gravely the legislature regards this kind of conduct. Price fixing and market sharing are not offences committed by accident, or in a fit of passion. The law, and the way it is enforced, should convey to those disposed to engage in cartel behaviour that the consequences of discovery are likely to outweigh the benefits, and by a large margin. 308 Critical to any anti-cartel regime is the level of penalty for individual contravenors. We tend to overlook the fact that corporations are constructs of the law; they only exist and possess rights and liabilities as a consequence of the law. Heavy penalties are indeed appropriate for corporations, but it is only individuals who can engage in the conduct which enables corporations to fix prices and share markets. 309 Many countries with free market economies have recognised this reality by enacting laws which make cartel conduct by individuals subject to criminal sanctions, including imprisonment. In the United States this happened as long ago as 1890 with the Sherman Act 15 U.S.C. More recently, as shown by the Organisation for Economic Co-operation and Development report Hard Core Cartels Third Report on the Implementation of the 1988 Recommendation , Paris, 2006, the following countries have laws providing for terms of imprisonment for cartel conduct: Canada, France, Germany, Ireland, Israel, Japan, South Korea, Mexico, Norway, Slovak Republic and the United Kingdom. 310 The Australian Government appointed an expert committee chaired by former High Court Justice Sir Daryl Dawson to report on Australia's competition laws. In April 2003 the Dawson Committee in its report ( Review of the Competition Provisions of the Trade Practices Act ) recommended (Report p 163) that, in the light of submissions made to it and growing overseas experience, criminal sanctions deter serious cartel behaviour and should be introduced. 311 On 2 February 2005 the Treasurer, the Honourable Peter Costello MP, announced acceptance of the recommendations of the Dawson Committee and stated that the Government would amend the Trade Practices Act to provide for a term of five years imprisonment, as well as increases in other penalties. The Treasurer noted: Dishonesty goes to the heart of serious cartel conduct, where customers are deceived when purchasing goods or services unaware that the price and supply of those goods and services were determined by collusion, rather than competition . Although, as already mentioned, the Act was amended last year to raise corporate penalties, the Government hasn't yet got around to introducing criminalisation.