Draft leniency policy to break hard core cartels issued

4 July 2002

The Australian Competition and Consumer Commission today issued a draft leniency policy aimed at breaking secret cartel participants.

This policy is in addition to the ACCC's existing General Cooperation Policy in Enforcement Matters.

"The draft policy provides clear, certain incentives for companies and individuals to 'blow the whistle' on the most serious and economically damaging contraventions of trade practices laws such as price-fixing, bid-rigging and market sharing", ACCC Chairman, Professor Allan Fels, said today.

"The draft policy would assist the ACCC eliminate hard core cartels operating in Australia that harm consumers, damage businesses and the economy and have a detrimental effect on innovation and employment.

"The ACCC seeks comment from interested parties before deciding to implement the policy.

"The ACCC has successfully detected and prosecuted hard core cartels operating in many significant Australian industries such as vitamins, concrete, freight, fire protection and transformers. However, it is likely that Australians continue to pay too much for some goods and services only because conspiring companies and their executives have secretly agreed to artificially inflate prices or limit production.

"Detecting, stopping and deterring hard core domestic and international cartels is a top priority for the ACCC. This new draft policy will create powerful incentives for persons to tear down the illegitimate cloak of secrecy that enables these law-breakers to make illicit profits at the expense of the public.

"The purpose of the draft policy is to give Australian corporations and their executives that have been involved in cartels an opportunity to come forward to the ACCC with evidence that will enable it to take action to stop the conduct and protect consumers. If the business or individual meets the conditions set out in the draft policy then they are guaranteed lenient treatment by the ACCC".

The essential terms of the policy are:

  • where the ACCC is unaware of an alleged cartel, the first company or individual to come forward will receive conditional 'immunity' from ACCC-instituted court proceedings

  • where the ACCC is aware of an alleged cartel but has insufficient evidence to institute court proceedings, the first company or individual to come forward will receive conditional 'immunity' from pecuniary penalty.

"It is the covert nature of these types of conspiracies between competitors that justifies this draft policy. The interests of Australian consumers and business customers in detecting, stopping and deterring cartels is likely to outweigh the public interest in instituting Court proceedings and seeking financial penalties against the first party to fully cooperate with the ACCC", Professor Fels said.

The ACCC seeks comment on the draft leniency policy from interested parties by no later than 30 August 2002. Submissions should be addressed to the ACCC’s Enforcement Coordination Branch, PO Box 1199, Dickson, ACT 2602.

Release number: 
MR 166/02
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