TRADE PRACTICES
Jail Terms for Cartel Conduct – TPA Amendments Passed
Thursday, 18 June 2009
The Trade Practices Amendment (Cartel Conduct and Other Measures) Bill was passed by the Senate on Monday night. Despite hopes that there would be material changes to the joint venture defence provisions, the only changes from the version of the Bill already passed by the House of Representatives were largely inconsequential. These revisions will almost certainly be passed by the House of Representatives next week. The result is that jail terms of up to 10 years jail for cartel conduct will be law from early August. Comments from Marcus Bezzi, the ACCC's head of enforcement, to a competition law conference last month on the ACCC’s intended approach to criminal prosecutions make interesting reading: ...if the tests under the Prosecution Policy of the Commonwealth are satisfied, it should be clear to everyone that the ACCC will always support a criminal prosecution. For the legal representatives of people who are being investigated this means that there will be no point trying to negotiate resolution of a serious cartel matter in the way that may have been done when civil proceedings were the only available option. The ACCC will simply not negotiate with you when a criminal prosecution is available for such conduct. We will never allow the prospect of a criminal prosecution to be traded away by an attractive offer for resolution of civil penalty proceedings. For serious cartel conduct, we would only be willing to commence negotiations for a resolution of an investigation through a civil penalty proceeding after the possibility of a criminal prosecution has been ruled out. It remains to be seen whether the ACCC will be able to cope in practice with the work load that will result from adopting a strict policy of prosecuting all 'serious' matters as criminal prosecutions. Unfair Contract Law – Bill due next week New national unfair contract rules will be introduced to Parliament next week. From the start of next year, these will render any 'unfair' term in any standard form business or consumer contract liable to be declared void. For more details, see our 12 May E’news The Bill will then go to the Senate, where it will be referred to the Senate Economics Committee for review. Anyone concerned about this new legislation should be sharpening their pens now to put submissions in to Senate Committee review process as soon as it opens. Let us know if you would like any help putting submissions together. New ACCC Civil Penalty Provisions The same Bill which introduces the new national unfair contract laws is also expected to introduce civil penalties for breaches of the consumer protection provisions of the Trade Practices Act (TPA). The TPA already includes criminal offence provisions for conduct such as misleading representations. However, prosecution under these provisions requires proof to a criminal standard, so for a number of years the ACCC has generally put it in the "too hard" basket. Prosecution under the new civil penalty provisions will easier for the ACCC as it will only require proof to a ‘balance of probabilities’ standard and will not require liaison with the Commonwealth Director of Public Prosecutions. As a result, expect to see more prosecutions from the ACCC for breaches of consumer protection rules from the second half of this year.
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