The Full Federal Court has today dismissed appeals by BlueScope Steel Ltd and its former General Manager, Jason Ellis, against earlier Federal Court decisions in a civil cartel proceeding brought by the ACCC.
The Full Court upheld earlier findings that between September 2013 and June 2014, BlueScope and Jason Ellis attempted to induce eight steel distributors in Australia, and overseas manufacturer, Yieh Phui, to enter agreements to fix and raise the level of pricing for flat steel products supplied in Australia.
This decision means the highest penalty ordered for a competition law breach of $57.5 million penalty against BlueScope, and a penalty of $500,000 against Mr Ellis remain in place.
The ACCC had alleged, and the Court had found, that the cartel conduct involved separate attempts by Mr Ellis and other BlueScope representatives, on behalf of BlueScope, to induce agreements containing a cartel provision, with eight competitors.
It also found that Mr Ellis, on behalf of BlueScope, approached several competitors and attempted to induce them to agree to enter into a contract, arrangement or understanding containing a cartel provision whereby distributors would use BlueScope's pricing information as a benchmark when pricing their flat steel products to their customers.
"We are pleased that today's Full Court decision has endorsed the findings made by the Court, and the penalties imposed," ACCC Acting Chair Catriona Lowe said.
"This case involved an attempted cartel which, if successful, could have created significant damage across the economy, as well as to customers and other businesses that compete fairly."
"We brought this case because there was evidence that BlueScope and Mr Ellis attempted to induce eight competitors to engage in cartel conduct which could have reduced price competition in the important Australian flat steel market, and potentially increased prices for flat steel products which are widely used in Australia," Ms Lowe said.
"Enforcing cartel laws is an ongoing priority for the ACCC. Any business or individual that attempts to enter collusive agreements with competitors risks significant penalties, even if attempts to collude and breach competition laws do not come to fruition."
Background
BlueScope is the major manufacturer of flat steel products in Australia. Flat steel products are an important material in several important sectors of the Australian economy, including the construction, building, manufacturing, automotive and transport industries. Flat steel products include hot rolled coil, cold rolled coil and steel plate and are essential materials in the construction, building, manufacturing, automotive and transport industries.
In August 2019, the ACCC instituted civil cartel proceedings against BlueScope and Mr Ellis.
In October 2019, Mr Ellis was charged with two counts of inciting the obstruction of a Commonwealth official, encouraging two other BlueScope employees to give false information and evidence to the ACCC, to which he pleaded guilty in September 2020.
Mr Ellis was convicted and sentenced to eight months imprisonment but was immediately released on a recognizance order in December 2020.
In December 2022, the Federal Court found that BlueScope and Mr Ellis engaged in cartel conduct in relation to the supply of flat steel products in Australia.
In August 2023, the Federal Court ordered BlueScope to pay a penalty of $57.5m, and imposed a penalty of $500,000 on Mr Ellis. The penalty ordered against BlueScope was the highest penalty ever imposed for cartel conduct in Australia. It was also the highest penalty ever imposed for a breach of Australia's competition law provisions.
Note
A cartel exists when businesses agree to act together instead of competing with each other. Conduct can include price fixing, sharing markets, rigging bids and controlling the output or limiting the amount of goods and services. More information on cartel conduct can be found on the ACCC's website at Cartels.
The ACCC investigates cartel conduct, manages the immunity process and, in respect of civil cartel contraventions, takes proceedings in the Federal Court.
For corporations, the maximum fine for each cartel contravention before 9 November 2022 is the greater of:
- $10 million,
- three times the total benefits that have been obtained and are reasonably attributable to the commission of the offence, or
- if the total value of the benefits cannot be determined,10 per cent of the corporation's annual turnover connected with Australia.
An individual found to have been involved in civil cartel conduct before 9 November 2022 is subject to a maximum penalty of $500,000 for each act or omission.
The maximum fines and civil penalties for cartel conduct by corporations were substantially increased with effect from 9 November 2022.
Anyone who thinks they may be involved in cartel conduct is urged to call the ACCC Cartel Immunity Hotline on (02) 9230 3894. More information about the immunity process is available on the ACCC website at Cartels.
Suspected cartel conduct can also be reported by using the ACCC's anonymous cartel portal, or by using the ACCC's online form to make a general enquiry.
