The Full Court of the Federal Court today reduced the penalty against Schneider (Electric) Australia Pty Ltd to $5.5 million for price-fixing and market-sharing in the distribution transformer market.
The penalty is still among the highest handed down by the Court for a breach of the competition provisions of the Trade Practices Act 1974.
"The penalty demonstrates that the Federal Court regards price fixing and marketing sharing as a very serious breach of anti-trust legislation", ACCC Acting Chairman, Mr Sitesh Bhojani, said today. "Chief Justice Black and Justice Sackville and Merkel each accepted that the unlawful conduct was extremely serious. The size of the penalty also reinforces the view that the companies should not benefit from illegal and covert activity".
Total penalties in this matter now stand at about $20.5 million.
The reasons the Full Federal Court decided reduce the penalty included that the trial judge overlooked an alteration to an agreed statement of facts, made to the court by the ACCC and Schneider, about future sales by the company. This reduced the future sales that would be received by Schneider from $50.8 million to $29 million.
Justice Merkel said: "The difference is substantial and was a matter that Schneider was entitled to have taken into account in its favour in respect of penalty". The Court also had regard to the size of penalties fixed against the Wilson Transformer Company, AW Tyree Transformers Pty Ltd and Alstom Australia Ltd, which are the other respondents in this case.
Counsel for Schneider stressed the 'parity principle' in arguing for a reduction in penalty. However Justice Merkel found: "…although I accept the importance of the parity principle, its application should not result in penalties that are inappropriate in the circumstances of the case. Put another way, if the penalties imposed on some participants are inadequate it does not follow that the penalties imposed on all participants must also be inadequate".
Justice Merkel described the conduct as "plainly antithetical" to the object of the Act, to enhance the welfare of Australians, and went on to say that the "contraventions are extremely serious and call for the imposition of penalties that are substantial".