Published: 29 August 2012
Summary: Mr Sims wants everyone in business to know that breaking the law for short term gain is just not worth it -- and if they've had any involvement in a cartel, the answer is to be the first member of the cartel to come to the ACCC and seek an immunity marker.
Today I am writing to CEOs across Australia as part of the ACCC’s efforts to explain exactly what constitutes cartel activity and its very serious consequences.
Cartels occur when businesses make agreements with their competitors to fix prices, rig bids, share markets or limit supply in order to maintain or increase their profits.
Businesses and individuals who enter into cartel arrangements with competitors are breaking the law and can face up to ten years in jail.
Cartels are against the law because they are anti-competitive and create an unfair playing field for businesses and consumers.
Now there is no excuse for this deceptive and dishonest conduct, including in hard economic times when some businesses may be struggling to survive.
Starting or joining a cartel is not only illegal; it is immoral and is viewed by the community as being akin to theft.
For each offence or contravention, companies face penalties of the greater of:
- $10 million, or
- three times the benefit gained from the conduct, or where this cannot be determined
- 10 per cent of annual turnover of the company or corporate group.
Under the new penalty regime, individuals face hefty fines, and a criminal record and up to 10 years in jail.
Now according to Melbourne University research, over a third of business people surveyed in 2010 either believed the cartel conduct was legal or were unsure whether it was against the law.
And although 42% of businesses were aware that cartel conduct is now a criminal offence, amazingly almost one in 10 admitted they’d still be likely to join a cartel if the opportunity arose.
Where cartels exist, Australians will be paying more for goods and services, which is a burden they should not have to bear.
When businesses compete fairly on their offers, prices and customer service, customers and smaller businesses receive the benefits of wider choices on price and quality.
When businesses cheat by forming cartels however they damage the economy, force other competitors and clients out of business and rip off consumers.
The ACCC wants everyone in business to know that cartel conduct is illegal and unacceptable in any circumstances.
That’s why I am sending a letter and a copy of our new short film, The Marker, which shows the devastating effect that cartel conduct has on individuals and businesses, to the CEOs at 300 of Australia’s largest companies.
Now I am urging CEOs to take steps to ensure that all their employees understand what constitutes cartel activity and the very serious consequences they face if they make under the table deals with competitors.
We’re also engaging with business, industry and legal peak bodies to distribute links to the film and our website to their staff, members and clients.
The ACCC is always seeking out cartels, encouraging people to report suspicious activities and urging participants to seek immunity in exchange for helping us with our investigations.
We use proactive measures to educate businesses and are currently investigating evidence of several possible cartels operating in Australia.
Where we find sufficient evidence of serious cartel activity, we will work with the Commonwealth Director of Public Prosecutions to bring criminal proceedings against alleged perpetrators.
We work closely with our international counterparts in the USA, Europe, Japan and Korea to deter and detect global cartels.
I urge anyone with knowledge of cartel activities to contact us.
Anyone currently or recently involved in cartel activity should be the first to apply for immunity.
As long as you are not the clear cartel leader and have not coerced others into a cartel, any business or person can apply to the ACCC for immunity from prosecution in exchange for helping us with our investigations.
As far as the law permits we maintain the confidentiality of immunity applicants.
There is no honour among thieves, so the sooner cartel members contact us for an immunity marker, the safer they may be.
For details about cartels and how to apply for immunity, go to the ACCC website or call the immunity hotline.