If you are a victim of a cartel you will almost certainly be paying more for your goods and services than you should be. This will impact your competitive position in the marketplace.
Protecting yourself against cartels is good risk management. If you become aware of suspicious activity you should contact the ACCC. If cartel conduct is proved, there may be scope for you to seek compensation.
Role of purchasing officers
If you do procurement work for your company, you will be in the best position to notice the first warning signs of collusion. By comparing bids with what your experience tells you should be the norm, you can detect suspicious bidding patterns. While talking with suppliers’ representatives, you may also pick up valuable information or tips that indicate something may be amiss. In these circumstances, we encourage you to report your concerns.
Warning signs
There is rarely a simple indicator of cartel activity, but some warning signs suggest you need to take a closer look. Cartels often go to great lengths to remain secret and are usually very hard to detect. Many warning signs can be ambiguous. That is why it is important to gather evidence and take notes that can assist you in making inquiries or reports to the ACCC. The information you provide, no matter how seemingly inconsequential, might be the missing piece of a puzzle that the ACCC needs to commence an investigation.
It is important to look out for:
Signs of possible bid rigging
Signs of possible price fixing
Signs of possible customer, supplier or territory allocation
Unusual mistakes
Information from whistleblowers
Do
ask yourself, do my records suggest that bidders seem to be taking turns at winning tenders? This may indicate tender rotation
ask yourself, do tenderers seem to win around the same percentage of the contracts from year to year? This may indicate market allocation
ask yourself, do suppliers seem to win contracts in certain areas but not in adjoining areas? This may also indicate market allocation
question bidders about their pricing. Note their replies and carefully record them for future reference
check your records against the checklist and warning signs for any suspicious signs
continue with the tender process, including awarding the contract.
act normally, so as not to alert the bidders
report your suspicions to the ACCC.
Do not
accuse the bidders of illegal behaviour—if you are right, this may give them time to cover their tracks; if you are wrong, you might open yourself to accusations of slander
launch your own internal investigation without contacting the ACCC—this might alert a cartel that they may be exposed and give them time to destroy evidence
attempt to apply your own penalty, rather than reporting to the ACCC
