The ACCC’s recent announcement that it had signed a cooperation agreement with the FBI signals its continuing intention to become increasingly proactive in its investigation of criminal cartel conduct.
On 15 April 2019, the Australian Competition and Consumer Commission (ACCC) announced that it had signed a Memorandum of Cooperation (MoC) with the United States Federal Bureau of Investigation (FBI), in order to enhance both agencies’ work in the detection, investigation and prosecution of competition offences.
The MoC is designed to complement an existing intergovernmental arrangement between Australia and the United States, which provides the basis for cooperation between the ACCC and various American competition law enforcement agencies. This new MoC provides the opportunity for increased information and resource sharing between the ACCC and the FBI, codifying an already close relationship between the two agencies that ACCC Chairman Rod Sims described as “rare” for regulatory bodies in different countries.
The ACCC and the FBI have collaborated on previous cartel investigations, including the air cargo case which ultimately resulted in almost $100 million in penalties being ordered against various airlines.
What does the MoC mean for the ACCC?
The terms of the MoC have not been released, rendering it difficult to be certain about what its consequences will be and in particular how it may change the ACCC’s investigative practices.
However, some hints may be gleaned from comments made by Marcus Bezzi, Executive General Manager for Enforcement and Compliance, on the sidelines of the American Bar Association’s Antitrust Spring Meeting in March 2019.
He said that the ACCC had recently received training from the FBI and the US Department of Justice (DoJ) on investigative techniques, and that the ACCC’s digital analysis team was developing “antitrust infringement screening opportunities”.
In particular, Mr Bezzi said that the ACCC was looking into increasing the scale of cartel investigations commenced by the ACCC itself. He lamented that currently, the majority of its investigations relied on an immunity applicant or a whistle-blower, which is “not a desirable state of affairs”.
These comments indicate that the ACCC is seeking to enhance its investigative tools for the purpose of adopting a more proactive approach to combating cartel conduct. They come in the context of the ACCC’s announcing in October 2018 that it had received nine immunity applications during 2018 and its receipt of $35 million in federal government funding in December 2018, including for six new investigators in its cartels unit. Rod Sims said on 16 April that the ACCC expects to undertake two or three criminal cartel cases per year, and that it is currently experiencing a “rush of applications for immunity”.
Indeed, only a week earlier, the ACCC had brought criminal cartel charges against a money transfer business and five individuals for allegedly fixing the exchange rate of the Australian dollar and the Vietnamese dong as well as the fees charged to their customers.
What can the ACCC learn from the FBI?
Rod Sims has championed the significant benefits to ACCC staff in learning about the techniques and approaches of the FBI, which has extensive experience in conducting highly complex criminal investigations, including in relation to cartels and other anti-competitive behaviour.
Unlike in Australia, where criminal cartel investigations are conducted primarily by the ACCC, in the United States they are conducted jointly between the DoJ and the FBI, although in practice almost all of the investigative work is done by the FBI. The role of the Australian Federal Police (AFP) in assisting the ACCC has historically been limited to facilitating search warrants, phone intercepts and listening devices.
The criminal cartel charges relating to exchange practices regarding the Vietnamese dong resulted from a joint ACCC-AFP investigation, and the AFP also played a role in investigating the Construction, Forestry, Maritime, Mining and Energy Union which led to criminal cartel charges being laid in August 2018.
Together with the MoC with the FBI, these joint investigations signal an enhanced partnership with the AFP.
What will this new crime-fighting partnership mean for the ACCC’s powers?
The ACCC is not lacking in powers under the Competition and Consumer Act 2010 (Cth) to investigate suspected crimes. Its far-reaching powers under s 155 allow it to obtain information, documents and evidence, and penalties for non-compliance were increased in 2017 to up to 2 years’ imprisonment or 100 penalty units (currently $21,000). In addition, as alluded to above, the ACCC may also conduct searches of premises and phone intercepts, and employ listening devices.
Given its increasingly close level of cooperation with the FBI, however, the ACCC should be expected to make more effective use of these existing powers (including with the AFP’s assistance) in order to support its increased focus on commencing its own investigations into criminal cartels and other anti-competitive conduct.
This post was authored by Lyndon Goddard, Solicitor, and Tom Norris, Senior Associate.
Image credit: “Crime Scene Do Not Cross” tape, by Tex Texin / Flickr / CC BY 2.0 / Remixed to B&W and resized
 See generally Michael Terceiro, ‘Few and Far Between: Criminal Cartel Enforcement in Australia’, Competition and Consumer Protection Law, http://competitionandconsumerprotectionlaw.blogspot.com/2016/12/few-and-far-between-criminal-cartel.html.