The Federal Court has today found oil and gas services company Qteq Pty Ltd and its executive chairman Simon Ashton engaged in cartel conduct in relation to the supply of goods and services in the oil and gas industry, following court action by the ACCC.
The Court found that between 2017 and 2019, on five occasions, Qteq and Mr Ashton attempted to induce suppliers in the industry to enter into contracts, arrangements or understandings with them which contained one or more cartel provisions.
Qteq and Mr Ashton were found to have attempted to induce competitors or likely competitors in the upstream phase of production in the oil and gas industry to enter into cartel arrangements or understandings, which included provisions not to supply particular services to large oil and gas companies, to share markets and to rig a multi-million-dollar tender.
"We brought this action because we believed these attempts had the potential to impact competition between Qteq and other current or likely competitors for the supply of goods and services in the oil and gas industry," ACCC Chair Gina Cass-Gottlieb said.
"Cartels are the most fundamental attack on competition in our economy, and taking actions against them is a high priority for the ACCC."
"Today's decision should send a strong warning to all businesses and senior managers that attempting to enter or induce collusive agreements with a competitor is illegal and will be met with strong enforcement action by the ACCC," Ms Cass-Gottlieb said.
The Court did not find in favour of the ACCC in relation to one additional instance of alleged cartel conduct.
The Court will set a date for a further hearing to consider submissions about penalties and other orders.
Publication of the judgment is pending confidentiality review by the respondents.
Background
Qteq is a Queensland-based company which provides mining equipment and technology services to support the upstream oil and gas industry.
Its primary business is the sale, installation, and servicing of downhole pressure gauges to coal seam gas producers, which is known as 'gauge works'. At the relevant time, Qteq was the market leader in providing gauge work services.
Gauge works are a form of monitoring and measurement where a downhole gauge system is inserted into a well to monitor the water level so that the rate at which water is pumped out of the coal seam can be controlled.
The ACCC filed civil cartel proceedings against Qteq and Mr Ashton in December 2022.
Notes for editors
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.
Anyone who thinks they may be involved in alleged 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. They can also report alleged cartel conduct by using the anonymous cartel portal.
The ACCC investigates cartel conduct and can take civil cartel proceedings in the Federal Court or refer serious cartel conduct to the Commonwealth Director of Public Prosecutions.
For corporations, the maximum penalty for each cartel offence 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 civil penalties for cartel conduct by corporations and individuals were substantially increased with effect from 9 November 2022.
