Criminalising Serious Cartel Conduct: Issues of Law and Policy
Melbourne Law School
University of Sydney - Faculty of Law
May 18, 2009
Australian Business Law Review, Vol 36, No. 3, 2008
U of Melbourne Legal Studies Research Paper No. 396
In January 2008 the government released an Exposure Draft Bill and associated materials relating to the long-promised introduction of criminal penalties for serious cartel conduct in Australia. These materials reflect the work of the previous government and are not endorsed necessarily by the new government. If enacted in the form released for public comment, the legislation would be the most significant reform of cartel regulation, if not competition regulation generally, since the Trade Practices Act 1974 (Cth) was introduced. The Exposure Draft Bill proposes not only to criminalise certain forms of collusion (with consequences for immunity policy, investigatory powers, corporate liability, concurrent proceedings, mode of trials and many other aspects of enforcement) but also to broaden substantially, and controversially, the scope of the civil prohibitions against arrangements between competitors. These reforms would involve a major shift in competition policy and approach to regulatory enforcement and would have important practical consequences for the Australian business sector and its advisors, as well as for the agencies charged with administering the new regime and the judiciary. In addition to their national impact, the reforms would have international significance given the recent campaign of regulators world-wide to combat cartel activity with harsher penalties and greater co-operation between foreign agencies. The Exposure Draft Bill contains numerous amendments to the Trade Practices Act. The proposed amendments are far-reaching - they touch on every aspect of the law, policy and practice relating to cartel regulation in Australia. Many are complex. Several are highly controversial. Some are surprising because they go far beyond the proposals foreshadowed by the Report of the Dawson Committee in 2003 and the former Treasurer's Press Release in 2005. Few would dispute the merits of criminalising serious cartel conduct in principle. However, the specific means of implementation proposed in the Exposure Draft Materials raise many questions. This article outlines the key features of the Exposure Draft Materials and provides a basic explanation of the proposed amendments. It draws attention to the main legal and policy issues and highlights areas in which changes should be made or further work needs to be done. Finally, it identifies and makes recommendations regarding the options for the government and Treasury going forward. The authors urge the government to tackle at least the most serious issues identified in their analysis in order to make the new law work.
Number of Pages in PDF File: 77
Keywords: criminal law, cartels, regulation, competition law
JEL Classification: K14, K21, K39
Date posted: May 23, 2009
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