Koppers Arch to pay a New Zealand record in cartel penalties
The High Court of New Zealand recently imposed record penalties of NZ$3.6 million (A$3 million) on Koppers Arch Wood Protection (NZ) Limited and its Australian parent company, Koppers Arch Investments Pty Limited, after the companies admitted participating in a cartel in the wood preservative chemicals industry between 1998 and 2002. The affected part of the industry was worth an estimated NZ$35 million (A$29.8 million) in 2002.
Commerce Commission Chair Paula Rebstock commented:
Koppers’ illegal gains came at the expense of ordinary New Zealanders—farmers paying more for their fence posts or home-owners paying more for their decking timber.
Ms Rebstock also pointed out that the Commission encountered significant obstruction in the course of their investigation.
Ms Rebstock said the High Court’s penalty would have been higher if Koppers Arch had not admitted guilt and cooperated with the Commission’s case against other defendants. In his judgment, Justice Williams agreed with the Commission’s submission that a penalty in the order of $7.2 million would have been appropriate had Koppers Arch unsuccessfully defended the case at a trial.
The illegal behaviour occurred between 1998 and 2002 in markets for two wood preservatives, chrome copper arsenate and light organic solvent preservative.
Leniency for whistleblower in French door-cartel case
France's competition watchdog, Conseil de la concurrence (Competition Council), has for the first time used whistleblower law to break up a price fixing conspiracy and grant immunity to one of the cartel members in return for its cooperation. The door manufacturers were only fined a total of €5 million (A$8.25 million). However, the Competition Council used it as an opportunity to advertise and explain the whistleblower option to companies.
France has had a law offering whistleblowing companies immunity since 2001. While the door cartel case was the first to come to fruition, 17 companies have so far come forward to confess infringements in the hope of obtaining leniency.
US concrete cartel
The US Department of Justice's continuing investigation into the ready mixed concrete industry has so far led to four companies and nine executives pleading guilty to colluding to set the price of ready mix concrete between 2000 and 2004.
Fines of more than A$39 million have resulted from the investigation of the ready mixed concrete industry. The following companies have been charged for their roles in the price-fixing conspiracy.
Carmel Concrete Products
Beaver Materials Corp
Builder's Concrete & Supply Co. Inc.
Irving Materials Inc.
Japan targets cartels
A construction company currently under investigation by Japan's Fair Trade Commission has admitted to being involved in a cartel to rig the bids for sewage and other public works ordered by the Niigata city government. An investigation into suspected bid-rigging for sewerage projects ordered by municipal governments nationwide is also underway. Japan's FTC has also conducted separate raids on more than 20 companies suspected of bid-rigging for public floodgate projects. More than 10 of these companies have also been indicted for their involvement in bid-rigging for a steel bridge project.
International Competition Network conference held in South Africa
Senior competition officials, private competition experts, lawyers and business experts from around the world gathered in Cape Town, South Africa in early May to discuss competition issues at the fifth annual International Competition Network (ICN) conference. The conference focused on the recent work of the four main ICN working groups: cartels, mergers, antitrust enforcement in the telecommunications sector and competition policy implementation. The ACCC is an active member of the ICN. For further information about the conference and the work of the ICN visit their website at: www.internationalcompetitionnetwork.org
US FTC extinguishes invention promotion scam
A US district court judge recently ordered an invention promotion operation to pay US$26 million (A$34.34 million) in consumer redress and has ordered a permanent halt to the bogus claims the company used to recruit customers. The court also ordered that in future dealings with consumers, the company make specific, detailed disclosures about their track record in helping inventors market their ideas.
Lydia Parnes, Director of the FTC’s Bureau of Consumer Protection said:
This outfit is typical of invention promotion scams; they touted their ability to turn inventors’ ideas into profitable products, but fewer than one per cent of the customers who invested in their services got royalties from their patents that amounted to more than they paid the promoters.
In a complaint filed by the FTC as part of ‘project mousetrap’ the agency charged that the company used internet ads and classified ads to lure inventors across the country to sign up for their services. The agency charged that they made false claims about their selectivity in choosing products to promote, false claims about their track record in turning inventions into profitable products, and false claims about the relationship they had with manufacturers. They deceptively claimed that their income came from sharing royalties with inventors rather than from the fees they charged inventors.
