ACCC seeks big jump in penalties

ANNABEL HEPWORTH
THE AUSTRALIAN
The nation’s competition tsar is pushing the Turnbull government to introduce harsher penalties for companies that fall foul of the law, declaring that it needs to “grab the attention” of company boards as “the message isn’t getting through clearly enough”.
Australian Competition & Consumer Commission chairman Rod Sims said the regulator would continue to seek higher penalties in the courts. Outlining next year’s priorities, Mr Sims said the ACCC would use a review of consumer laws to push for a slew of reforms.
“What we are trying to do is to get higher penalties awarded from the courts in competition cases because our concern is the penalties just aren’t high enough to grab the attention of company boards,” he said.
Cartels remain a particular focus, with penalties in Australia for competition breaches “much lower than overseas”. He said fines in the US or Europe usually were calculated as a percentage of a company’s turnover during the cartel period — which could amount to $100 million.
“So we are hoping to get those penalties higher so that company boards take these matters more seriously,” he said. “We are still getting three cartel immunity applicatio­ns a month so I don’t think the message is getting through clearly enough.
“I think if you are getting quite low penalties then boards will not give it as much attention as if you have high penalties.”
Mr Sims said the focus would be on “trying to argue to the court that penalties should be higher than they have been”. He indicated that the ACCC was poised to seek tougher penalties for consumer law breaches when the Australian Consumer Law is reviewed by Consumer Affairs Australia and New Zealand.
The ACCC alleged this month that supermarket operator Woolworths had tried to squeeze up to $60m from more than 800 suppliers. Mr Sims said the action was “one of the worst” cases of unconscionable conduct he had seen.
The ACCC previously has pointed to comments by a judge in a case against Coles alleging unconscionable­ conduct over its dealings with smaller suppliers. In that case, the judge said the maximum penalties available were “arguab­ly inadequate” for a company the size of Coles.
Mr Sims said the regulator was also likely to raise concerns that the law says publicly listed companies cannot be on the receiving end of unconscionable conduct. Specifically, it wants law changes so such conduct towards publicly listed companies could be ­addressed by the laws.
Another focus next year will be the government’s response to the Harper review of competition policy. The cartel laws were simplified but a key issue for the commission would be the drafting of the government’s plans to amend an exemption for “demonstrable and deliberative” joint-venture activity.
Mr Sims said the commission had a “lot of very important” cases before the court next year, including an action against the CFMEU alleging secondary boycott; a case against petrol retailers over alleged­ price information sharing; and an attempt to appeal against a decision in favour of Flight Centre in a case alleging an attempted anti-competitive deal to eliminate differences in international fares.