2016 Mid-Year Global Cartel Report Released

Tuesday 5 July 2016 @ 2.04 p.m. | Trade & Commerce

Allen & Overy's 2016 mid-year report on global cartel enforcement has been released, with the firm reporting that overall, fines have slumped in the first half of the year - the firm atrributing this to slow starts to the year by competition authorities in the United States and the European Union. Asia Pacific authorities, and particularly Korea’s Fair Trade Commission, account for more than half of the mid-year fine total.

Developing Trends in Global Cartel Enforcement

According to the report, trends to look out for in the second half of 2016 include:

  • Declining fines in the US market;
  • Rebounding fine totals in the European Union;
  • More fines from APAC, particularly enforcers like the Korean Fair Trade Commission and Japan Fair Trade Commission; and
  • A rise in cases of individual accountability across regimes.

 Allen & Overy's global co-head of antitrust, John Terzaken, said the downturn in fines is largely due to the cyclical nature of investigations and key enforcers having completed high-profile investigations at the end of last year:

"[The decrease in fines] doesn’t necessarily reflect a drop off of enforcement, but it does reflect the fact that many of the large cases that we saw come down last year have now resolved."

Cartel Enforcement Activity in Australia

The Australian section of the report notes that although there were no fines imposed by the Federal Court for the Australian Competition and Consumer Commission (ACCC) in 2015:

"Chairman Rod Sims made assurances that it had multiple investigations underway, the fruit of which would be seen in the first half of 2016."

The report found that the ACCC achieved four competition law fines totalling $45.7 million in the first half of 2016.

This included:

  • The largest fine was imposed against Cement Australia Pty Ltd and related companies for restricting competition by preventing competitors access to flyash, a cheap partial substitute for cement in ready-mix concrete; and

  • The fine imposed on Colgate-Palmolive for entering into understandings with competitors to limit the supply and control the price of laundry detergent powders was a close second. A fine was also imposed on Woolworths in the same matter.

According to the report, the ACCC is also awaiting penalty outcomes in a number of cartel proceedings, including in proceedings against Air New Zealand and Garuda Indonesia relating to the air cargo price fixing cartel, and in proceedings against Yazaki Corporation relating to price fixing of motor vehicle wire harnesses.

According to Chairman Sims, the ACCC also has around 20 cartel investigations under way, and he expects to commence one or two criminal prosecutions this year. Criminal sanctions for serious cartel conduct were introduced in Australia in 2009, but no criminal cases have been filed to date.

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