The Federal Court has imposed a pecuniary penalty of $3.5 million against Prysmian Cavi E Sistemi S.R.L. (Prysmian), an Italian corporation, for engaging in cartel conduct in relation to the supply of high voltage land cables in Australia.
The Court found in July last year that Prysmian had entered into and given effect to agreements involving price guidance to competitors and project allocation. The contravening conduct related to an Australian project in 2003 to supply high voltage land cables and accessories to the Snowy Mountains Hydro Electric Scheme.
“This penalty takes into account that, although Prysmian’s conduct was serious and deliberate, it occurred over a relatively short period of time in 2003. As Prysmian did not secure the contract to supply the Snowy Mountains scheme, Snowy Hydro did not suffer a loss from the conduct. However, the ACCC had submitted that a penalty of $7 million was appropriate and we will carefully consider the judgement,” ACCC Commissioner Sarah Court said.
Prysmian was a party to an agreement with other cable manufacturers and suppliers to ‘allocate’ the tender to Prysmian and then gave effect to that agreement by providing pricing guidance to its competitors so that they could submit higher amounts in an attempt to ensure that Prysmian won the tender.
“Detecting, stopping and deterring domestic and international cartels is a priority for the ACCC. Cartels not only cheat consumers and businesses, they distort competition and restrict healthy economic growth,” Ms Court said.
“In 2017 we will be making concerted efforts to ensure that the penalties we seek make larger companies and individuals who work in them consider their business practices, and how their business practices meet their obligations under competition and consumer law.”
High voltage cables are used by generators and distributors of electricity and by major construction, mining and development companies. These cables are designed to either pass under land or under oceans or water courses.
The proceedings brought by the ACCC were instituted against Nexans SA, Prysmian and Viscas Corporation in relation to the price fixing and exclusionary arrangement provisions of the Trade Practices Act 1974 (now called the Competition and Consumer Act 2010).
The contravening conduct formed part of an over-arching agreement or understanding between a group of European cable suppliers and a group of Japanese cable suppliers which provided for the allocation of projects around the world.
In 2013, the Federal Court imposed a penalty of $1.35 million against a Japanese cable supplier, Viscas Corporation, for its part in the conduct, following the filing of joint submissions and agreed facts.
In July 2016, the Court found that Prysmian had engaged in cartel conduct but dismissed the ACCC’s case against Nexans SA.
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