The Australian Competition and Consumer Commission has signed a Memorandum of Understanding with the South Australian State Government detailing strategies to combat cartel conduct in the state.
The MOU outlines the process for the ACCC and the State Government to both detect and deter cartels from targeting government tendering and procurement processes.
“The ACCC is pleased to be working closely with the SA Government to fight cartel conduct,” ACCC chairman Rod Sims said.
“The agreement streamlines the reporting process and strengthens the deterrence for businesses to engage in cartel conduct.”
“The MOU will also increase the likelihood that cartel behaviour will be detected and punished. Companies considering such conduct should be reminded that the tough sanctions now include the real possibility of imprisonment for company officers involved in cartel conduct - for up to ten years,” Mr Sims said.
A cartel occurs when competitors collude to fix prices, rig bids, restrict supply or allocate markets. The public sector is a large purchaser of goods and services and cartel agreements can significantly increase costs or provide poor value for public money.
As public purchasing is transparent and accountable it provides opportunities for cartels to collude and coordinate their bidding. There is a long history of cartels targeting the public sector, both domestically and overseas.
The ACCC has experience dealing with cartels engaged in government procurement.
Cartel conduct includes:
- price fixing
- output restrictions
- allocating customers, suppliers or territories
- bid-rigging.
The ACCC has published ‘Cartels, deterrence and detection, a guide for government procurement officers’ as a practical guide for public sector purchasers. It outlines how cartels work, and what measures are effective to disrupt them.