ACCC tells government to get tough quickly on cartels

A report in the Melbourne Herald Sun says that competition  chief Graeme Samuel has urged the Rudd Government to make cartel behaviour a criminal offence as soon as possible, with Mr Samuel saying recent comments by Qantas boss Geoff Dixon, after the airline was slapped with a $70 million fine for price-fixing within its air freight division, showing some companies perceived fines as merely “a cost of doing business”.

“The important thing is he said (the fine) was not going to have ‘a material impact’ on (Qantas’s) bottom line,” Mr Samuel said.

“If I rephrase it, it is simply a cost of doing business. “

“If that’s what it’s all about then we’ve got to take some other steps.”

Speaking at a Chartered Secretaries Australia conference in Melbourne yesterday, the Australian Competition and Consumer Commission chairman said he was pleased the Rudd Government was committed to criminalising cartel activity.

“The Government has said, ‘We will be introducing legislation within the first 12 months’,” Mr Samuel said.

“I can say that the legislation has been drafted several months ago and is sitting there waiting . . . We would hope it’s put into place very, very quickly.”

Mr Samuel’s calls for criminal penalties for price-fixers have strengthened since late October, when billionaire Richard Pratt and his Visy group of companies were fined an Australian record $36 million for colluding in a price-fixing deal with rival Amcor.

Mr Samuel noted yesterday that the Visy fine beat a $US29.2 million ($A33.2 million) fine issued by the US Department of Justice for a domestic cartel offence.

“But it’s still not enough,” he said. “This is simply a cost of business.”

Mr Samuel said there appeared to be a “partial lack of appreciation” from business about the importance of competition laws.

“There’s a bit of the haze around the edges of competition law, but I think it’s now becoming fundamentally clear that competition, or breaches of competition, are as much a defrauding of the consumer as breaches of the corporation law are defrauding shareholders and investors.”

Mr Samuel also hit back at comments from Sydney broadcaster Alan Jones, who said the ACCC should make “surprise raids” on businesses to uncover price-fixing, as European regulators had done

.Mr Samuel dismissed Mr Jones’s comments, saying such raids would be unethical and inappropriate and could damage reputations if an investigation came to nothing.

“One of the things that people like Alan Jones will never understand is that the way that regulators best operate is very quietly — we actually don’t talk about what we do during the investigatory phase,” Mr Samuel said.

He added that the ACCC tried to maintain the confidentiality of an investigation and the identity of witnesses unless it was “absolutely unavoidable”.

He said it was particularly important to protect the identity and interests of “whistleblowers” to cartel behaviour.

“If there is any sense of intimidation or victimisation of the whistleblower then we’ve got laws to deal with that as well,” Mr Samuel said.

“There is no hesitation on the part of the ACCC in taking appropriate criminal prosecutions if it becomes necessary to deal with attempts to, shall we say, impede witness or to influence witnesses.”

Australian Securities and Investments Commission chairman Tony D’Aloisio, who was also at yesterday’s conference, agreed that protecting whistleblowers was paramount.

“I think this will become a much bigger public policy issue as these cases unfold,” Mr D’Aloisio said.

A Report by The Mole from The Herald Sun