Highly ACCCountable

Published On 10/03/2015 | By Alex Horne | Enforcement

In early March 2015, the ACCC has released its December 2014 Quarterly Report. The Report highlights the key activities of the regulator in the quarter.

Penalties

The ACCC secured in excess of $19 million in penalties for breaches of the Competition and Consumer Act 2010 (CCA). This included two significant penalties determinations made by the Federal Court.

The first involved penalties totalling $8.3 million against Renegade Gas Pty Ltd, Speed-E-Gas Pty Ltd, and three current and former senior officers of the companies, for engaging in cartel conduct. The ACCC also confirmed that it currently has ten cartel investigations underway.

The second involved penalties totalling $10 million against Coles Supermarkets Australia Pty Ltd for unconscionable conduct in relation to its dealings with its suppliers. Regarding the cartel conduct, ACCC Chairman Rod Sims observed that,

Secret agreements between competitors drive up prices, cheat consumers, and harm the wider economy. Detecting, disrupting and destroying cartels is a prime focus of ACCC activity and this penalty should serve as a warning that the ACCC will target both business and individuals in the pursuit of cartel conduct.

Proceedings

The ACCC was involved in 17 proceedings relating to competition enforcement. 14 cases were carried over from the previous quarter and one case was concluded. Three new cases were initiated. One of these was the initiation of proceedings against the Construction, Forestry, Mining and Energy Union for breach of the CCA, alleging it engaged, or attempted to engage, in secondary boycott conduct directed towards Boral Resources (Vic) Pty Ltd and Alsafe Premix Concrete Pty Ltd.

The ACCC also initiated proceedings against Olex Australia Pty Limited & several others, alleging cartel and exclusionary conduct in the supply and acquisition of electrical cable throughout Australia. The third competition enforcement case initiated in the quarter was against Little Company of Mary Health Care Limited (and its subsidiary), alleging that new by-laws introduced regulating the use of its medical facilities by medical practitioners had the purpose of substantially lessening competition.

Enforceable undertakings

In addition the ACCC obtained four court enforceable undertakings under section 87B of the CCA. One was from Standard White Cabs Limited, trading as Townsville Taxis, in relation to exclusive dealing and exclusionary arrangements. A further two were from Italiatech Australia Pty Ltd and TMO Sports Pty Ltd respectively, in relation to resale price maintenance in the importation and distribution of bicycle parts and accessories. It also commenced eight new civil proceedings in the Federal Court.

Mergers

Of the 84 merger matters assessed or reviewed in the quarter, the ACCC emphasised as “significant” its decisions not to oppose either the proposed clay brick joint venture between CSR Limited and Boral Limited or Elgas Limited’s acquisition of Westfarmers Kleenheat Gas Pty Ltd’s east-coast LPG business. The latter decision was subject to Elgas’ acceptance of court-enforceable undertakings. It also decided not to oppose Expedia Incorporated’s acquisition of Wotif.com Holdings Limited.

Authorisations

Of its 12 final determinations regarding authorisations of arrangements, the ACCC described two as “of note”.

  • its decision to grant conditional authorisation for Tooltechnic Systems (Australia) Pty Ltd to set minimum retail prices on Festool power tools until December 2018, which we posted about here.
  • its decision to grant authorisation until December 2017 to Victorian taxi operators participating in a cooperative in relation to minimum fares charged for booked and contracted work.

The work of the AER

The AER now has a new chair. Ms Paula Conboy commenced in October 2014, following the departure of Mr Andrew Reeves. The AER’s activities in the December quarter included issuing draft decisions on revenue proposals made by seven energy distribution and transmission businesses for the ACT, NSW and Tasmania; releasing its State of the Energy Market Report; and providing a submission to the Harper review regarding the proposal to create a national access and pricing regulator.

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About The Author

is a law graduate in the KWM Competition team.

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