Penalties totalling $927,500 have been imposed on individuals and companies involved in a Victorian abalone cartel.
The Australian Competition and Consumer Commission instituted proceedings against 19 parties alleging breaches of the Trade Practices Act 1974 and the Victorian Competition Code.
It alleged an arrangement for collective action about the pricing and provision of abalone harvested from the central abalone fishery zone in Victoria by eight abalone quota holders.
The ACCC alleged that under the arrangement the parties would not supply a processor customer unless that processor paid a premium on top of an average 'beach' price (market price) and was a processor nominated by Australian Abalone Pty Ltd, a corporate vehicle created to market the catch by the quota holder and others.
The cartel arrangement provided for penalties if a quota holder supplied outside the arrangement. The ACCC alleged, and Justice Weinberg of the Federal Court in Melbourne found, that the conduct contravened the primary boycott and price fixing provisions of the Act and the Code.
The ACCC submitted that the conduct was likely to have caused loss or damage to processors not nominated and to have harmed competition for abalone supply.
The trial ended in October this year with the respondents admitting the contraventions and the parties submitting agreed penalties and other orders to the court.
Justice Weinberg noted the case was unusual as there was no attempt to conceal the arrangement. Even more remarkable was that a number of lawyers and accountants had "cast their eyes over the relevant documents, and failed to detect a possible breach."
He accepted that Australian Abalone did not make any significant profit from the arrangement; it was short lived; and that the parties were unaware they might be contravening the law.
However he stated: "the respondents had a responsibility to ensure that they knew the law, and that the law was obeyed."
In making orders and imposing penalty, he commented that the penalties sought and agreed were for the most part well within what he would regard as the "permissible range".
He went on to say: "the fact that the court has fixed penalties of this order for cartel conduct that is plainly at the less serious end of the scale should send a message to those that might be minded to enter into arrangements of this nature."
ACCC Chairman, Mr Graeme Samuel noted "the case sent a strong message that cartel conduct was viewed seriously by the courts.
"While the court had distinguished this case from hard-core cartel conduct, it had commented within the judgment, as had happened in the Visy judgment earlier this month, that in appropriate cases cartel conduct warranted the imposition of criminal sanctions, including imprisonment."
Justice Weinberg also ordered a contribution of $161,000 towards the ACCC's court costs.