The competition watchdog has won a fight against Australia’s biggest steel maker BlueScope over price fixing.
Federal Court Justice Michael O'Bryan today ruled in favour of the Australian Competition and Consumer Commission (ACCC), which had brought civil proceedings against BlueScope and former general manager, sales and marketing Jason Ellis.
The ACCC had alleged the steel maker engaged in "cartel conduct" over the supply of flat steel products.
The win could have a big impact on future cases over companies colluding to fix prices.
“The court has found that BlueScope, which is one of Australia’s largest companies, and its former senior executive, Jason Ellis, attempted to induce competitors to enter into price fixing arrangements,” ACCC Commissioner Liza Carver said in a statement after the decision.
It has been a decade since the offences.
The fix
The ACCC alleged that between September 2013 and June 2014, BlueScope and Mr Ellis tried to induce steel distributors in Australia and overseas manufacturers to enter agreements containing a price-fixing provision.
Those inducements would have fixed or raised the cost of flat steel products in Australia.
“If successful, these attempts would have resulted in agreements between competitors which reduced price competition in the Australian flat steel market and increased prices for flat steel products which are widely used in Australia,” Ms Carver said.
Flat steel is an essential material for builders, manufacturers and the automotive industry, so the increased costs would have been worn by millions of consumers.
Ms Carver said the decision would be useful in any future cases the ACCC brings.
"This is an important decision which has the potential to strengthen the ACCC's position in future cases of attempted cartel conduct," she said.
“This should serve as a strong warning to all businesses and individuals that even attempting to reach a price fixing arrangement with one or more competitors may have very serious consequences, on both a corporate and personal level.”
The competition watchdog sought a range of penalties, including a pecuniary penalty – a fine intended to punish the recipient.
It also wants Mr Ellis to be banned from running companies.
A hearing about the penalties is scheduled for April 3, 2023.
Jail sentence
In late 2020 Mr Ellis was sentenced to eight months' jail after being convicted by the NSW Local Court for inciting others to obstruct the investigation.
He did not enter custody but was on a "good behaviour" bond for two years.
Magistrate Jennifer Atkinson said Mr Ellis had committed a serious offence, and that "in all dealings [with the ACCC] a person needs to allow investigations to run properly, without any attempt to hinder investigations by officials".
The former executive incited two BlueScope colleagues to give false evidence to the ACCC, regarding discussions they had at meetings with competing steel companies.
Company 'disappointed'
Today, Bluescope said it was “disappointed” by the court’s decision and would consider appealing.
In a statement, BlueScope chairman John Bevan said things had changed.
"In the time since BlueScope first became aware of the conduct which led to the legal proceedings, BlueScope has implemented a number of steps to substantially strengthen its programs to enhance awareness of, and compliance with, competition law," he said.
"The company has also made improvements to our organisational structure, internal systems and processes, training for employees, and developed in-house advisory capabilities in competition law."
