The Federal Court has made orders by consent against American-based company, DRS C3 Systems for cartel behaviour in the international military defence training systems industry.
As part of the resolution of the proceedings brought by the Australian Competition and Consumer Commission, DRS agreed to pay $1 million in penalties.
DRS entered into an agreement with another company that it would withdraw from a proposed procurement of an air combat manoeuvring instrumentation system by the Commonwealth of Australia for use as part of a joint training exercise between Australian military forces and the US Air Force in the Pacific.
DRS admitted that its conduct contravened the Trade Practices Act 1974, and consented to court orders:
to pay a penalty of $1 million
to be restrained from engaging in similar conduct
to strengthen its existing corporate compliance program focusing on the provisions prohibiting anti-competitive agreements contained in the Act, and
to pay an agreed contribution of $100,000 to the costs of the ACCC proceedings.
The resolution of this matter took into account that the conduct was an isolated incident over a confined period of time and did not cause any evident loss or damage to the Commonwealth Department of Defence.
The court also took into account the significant level of co-operation provided by DRS to the ACCC during the investigation of the matter and its willingness to admit the conduct and agree to settlement terms. As a result of this cooperation and expression of contrition, the court agreed with the joint submission of the parties that the penalty should be discounted by one-third.
ACCC chairman Graeme Samuel noted that: "The ACCC takes cartel conduct very seriously. This matter shows the ACCC will pursue with vigour corporations that engage in collusive conduct in breach of the Act, even where the actual damage caused by the conduct is minimal."
