In civil cartel proceedings brought by the ACCC, the Federal Court has found that BlueScope Steel Limited and its former general manager of sales and marketing, Mr Jason Ellis, engaged in cartel conduct in relation to the supply of flat steel products in Australia.
The Court found that between September 2013 and June 2014, BlueScope and Mr Ellis attempted to induce eight steel distributors in Australia, and overseas manufacturer, Yieh Phui, to enter agreements to fix and/or raise the level of pricing for flat steel products supplied in Australia.
“The Court has found that BlueScope, which is one of Australia’s largest companies, and its former senior executive, Jason Ellis, attempted to induce competitors to enter into price fixing arrangements,” ACCC Commissioner Liza Carver said.
“If successful, these attempts would have resulted in agreements between competitors which reduced price competition in the Australian flat steel market and increased prices for flat steel products which are widely used in Australia.”
“Cartels not only disadvantage other businesses which are competing lawfully, but can also lead to consumers paying higher prices.”
“This is an important decision which has the potential to strengthen the ACCC’s position in future cases of attempted cartel conduct,” Ms Carver said.
“This should serve as a strong warning to all businesses and individuals that even attempting to reach a price fixing arrangement with one or more competitors may have very serious consequences, on both a corporate and personal level. Corporations and individuals involved in cartel conduct may face either ACCC civil enforcement action or potential criminal charges brought by the Commonwealth Director of Public Prosecutions.”
A hearing on penalties and other orders has been set down for 3 April 2023. In addition to seeking penalties against both BlueScope and Mr Ellis, the ACCC is also seeking an order disqualifying Mr Ellis from managing corporations for a period to be determined by the Court.
This decision comes after Mr Ellis was convicted and sentenced in December 2020 for inciting the obstruction of an ACCC investigation, as a result of his conduct encouraging two other BlueScope employees to give false information and evidence to the ACCC during its investigation of the cartel conduct.
BlueScope is the major manufacturer of flat steel products in Australia. Flat steel products are an important material in a number of important sectors of the Australian economy, including the construction, building, manufacturing, automotive and transport industries.
In August 2019, the ACCC instituted civil cartel proceedings against BlueScope and Mr Ellis.
In October 2019, Mr Ellis was also charged with two counts of inciting the obstruction of a Commonwealth official, to which he pleaded guilty in September 2020.
Mr Ellis was convicted and sentenced to eight months imprisonment but was immediately released on a recognizance in December 2020.
Note for editors
A cartel exists when businesses agree to act together instead of competing with each other. Conduct can include price fixing, sharing markets, rigging bids and controlling the output or limiting the amount of goods and services. More information about cartel conduct can be found on the ACCC’s website at Cartels.
The ACCC investigates cartel conduct and can take civil cartel proceedings in the Federal Court or refer serious cartel conduct to the Commonwealth Director of Public Prosecutions.
The ACCC works to detect cartels including through education programs, proactive intelligence gathering and data assessment and working with overseas counterparts to identify cartels that operate on a global level.
The ACCC also manages an immunity program that enables past or present cartel members to confess their actions and cooperate with investigations in exchange for immunity from civil cartel proceedings brought by the ACCC and criminal cartel charges laid by the Commonwealth Director of Public Prosecutions (CDPP).
Anyone who thinks they may be involved in cartel conduct is urged to call the ACCC Cartel Immunity Hotline on (02) 9230 3894. More information about the immunity process is available on the ACCC website at Cartels.
You can also report cartel conduct by using the anonymous cartel portal.
Public procurement officials who want to know more about detecting cartels are encouraged to contact the ACCC Cartel Outreach team at email@example.com.
For corporations, the maximum penalty for each cartel contravention before 9 November 2022 is the greater of:
- $10 million,
- three times the total benefits that have been obtained and are reasonably attributable to the commission of the offence, or
- if the total value of the benefits cannot be determined,10 per cent of the corporation’s annual turnover connected with Australia.
An individual found to have been involved in civil cartel conduct before 9 November 2022 is subject to a maximum penalty of $500,000 for each act or omission.
The maximum civil penalties for cartel conduct by corporations were substantially increased with effect from 9 November 2022, by legislation passed by Parliament in October.