Five companies and nine individuals have been penalised a total of $485,000 for cartel behaviour involving price fixing and boycotts in the NSW scrap metal market in orders handed down today by Justice Annabel Bennett of the Federal Court, Sydney. Costs of more than $100,000 have also been ordered.
The Australian Competition and Consumer Commission began proceedings in December 2001 alleging that throughout 1999 collusive conduct occurred at scrap metal auctions in NSW.
It alleged that the respondents formed groups at auctions, known as “rings” and gave effect to agreements, that restricted the acquisition of scrap metal from auctioneers and had the purpose or likely effect of fixing, controlling or maintaining the price of scarp metal at the auction. The auctioneers were unaware of the ring.
The respondents met later in the day at a nearby club or hotel to hold a second auction, known as a 'knock', amongst themselves to allocate the group's purchase.
Justice Bennett said that but for the operation of the ring and the 'knock', the ring members would have been in or would likely to have been in competition with each other to acquire scrap metal at the auctions.
Evidence was given by witnesses that the rings had operated at scrap metal auctions in NSW for decades.
Many of the individuals and companies made voluntary admissions they had engaged in boycotts and price fixing in breach of sections 4D and 45A of the Trade Practices Act 1974. Several also admitted to having engaged in misleading and deceptive conduct in breach of section 52 of the Act. One company and three individuals contested the matter and the court found against them for price fixing and boycotts.
Injunctions were granted to restrain the parties from engaging in the conduct in future. Orders were also made for a contribution to the ACCC's costs.
One of the individuals had refused to attend court at any stage over a two year period. Justice Bennett consented to the ACCC request that orders be made against the individual noting that a thorough attempt had been made to inform the respondent of the proceedings and to serve all documents required to be served by the court.
"People engaged in business regardless of their size needed to be aware of their obligations under the Trade Practices Act", ACCC Chairman, Mr Graeme Samuel, said. “As I’ve stated at length, cartel behaviour is not acceptable. Cartels will be pursued relentless by the ACCC, prosecuted with vigour and substantial penalties sought against offenders through the courts".
Commenting on Justice Bennett's statement in her decision that the parties were not aware that they were breaking the law with their activity Mr Samuel said: "In recent years the ACCC has greatly increased its Small Business Program which provides information to small business people about their responsibilities under the Trade Practices Act and the protection it provides".
Information is available from the ACCC's small business managers and regional outreach managers, Infocentre 1300 302 502 and website.