Australian Competition and Consumer Commission v Cement Australia Pty Ltd [2016] FCA 453

Australian Competition and Consumer Commission v Cement Australia Pty Ltd [2016] FCA 453

The Court held that the relevant respondents deliberately included and gave effect to anti-competitive provisions in several key contracts in the SEQ flyash market, with the substantial purpose and effect of foreclosing rivals and substantially lessening competition, in contravention of s 45(2)(a)(ii) and (b)(ii) of the Trade Practices Act 1974 (Cth). The appropriate penalties must deter such calculated conduct, take account of market harm and benefit to the respondents (even if not precisely quantifiable), the size and position of the companies, and senior management involvement. Penalties were awarded (totalling approximately $18.27 million) specific to each contract and period,...

Parties
Applicant: Australian Competition and Consumer Commission; First Respondent: Cement Australia Pty Ltd; Second Respondent: Cement Australia Holdings Pty Ltd; Third Respondent: Cement Australia (Queensland) Pty Ltd (formerly Queensland Cement Ltd); Fourth Respondent: Pozzolanic Enterprises Pty Ltd; Fifth Respondent: Pozzolanic Industries Pty Ltd; Sixth Respondent: Christopher Guy Leon; Seventh Respondent: Christopher Stephen White; Other Party: Sunstate Cement Ltd; Other Party: Independent Flyash Brokers Pty Ltd
Jurisdiction
Australia
Judgment Date
29 April 2016
Procedural Posture
Civil Penalty Proceeding / Penalty Determination After Liability Findings
Outcome
Penalties imposed for contraventions of s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth) by the relevant corporate and individual respondents in specific sums; costs awarded to ACCC as per orders.
Legal Topics
Anti Competitive Agreements, Pecuniary Penalties, Market Power, Assessment of Penalties, Section 45 Trade Practices Act, Deterrence in Competition Law
Competition Law Trade Practices Anti Competitive Agreements Pecuniary Penalties Market Power Assessment of Penalties Section 45 Trade Practices Act Deterrence in Competition Law

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Parties

Australian Competition and Consumer Commission

Applicant

Cement Australia Pty Ltd

First Respondent

Cement Australia Holdings Pty Ltd

Second Respondent

Cement Australia (Queensland) Pty Ltd (formerly Queensland Cement Ltd)

Third Respondent

Pozzolanic Enterprises Pty Ltd

Fourth Respondent

Pozzolanic Industries Pty Ltd

Fifth Respondent

Christopher Guy Leon

Sixth Respondent

Christopher Stephen White

Seventh Respondent

Sunstate Cement Ltd

Other Party

Independent Flyash Brokers Pty Ltd

Other Party

Procedural Posture

Civil Penalty Proceeding / Penalty Determination After Liability Findings

Legal Issues

  1. 1 What is the appropriate pecuniary penalty for contraventions of Part IV of the Trade Practices Act 1974 (Cth), specifically s 45(2)(a)(ii) and s 45(2)(b)(ii), relating to anti-competitive arrangements in the South East Queensland concrete grade flyash market?
  2. 2 What principles govern assessment of pecuniary penalties under s 76 of the Trade Practices Act 1974 (Cth)?
  3. 3 What is the correct approach to determining market harm and benefit from contravening conduct in competition penalty proceedings?

Ratio Decidendi

The Court held that the relevant respondents deliberately included and gave effect to anti-competitive provisions in several key contracts in the SEQ flyash market, with the substantial purpose and effect of foreclosing rivals and substantially lessening competition, in contravention of s 45(2)(a)(ii) and (b)(ii) of the Trade Practices Act 1974 (Cth). The appropriate penalties must deter such calculated conduct, take account of market harm and benefit to the respondents (even if not precisely quantifiable), the size and position of the companies, and senior management involvement. Penalties were awarded (totalling approximately $18.27 million) specific to each contract and period,...

Court Disposition

Penalties imposed for contraventions of s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth) by the relevant corporate and individual respondents in specific sums; costs awarded to ACCC as per orders.

Orders

  • Applicant to submit to the Court proposed final orders for penalties in accordance with the reasons published, including:
  • Pecuniary penalty of $3.5 million to Commonwealth by Pozzolanic Enterprises Pty Ltd and Cement Australia (Queensland) Pty Ltd (jointly and severally) for making the Original Millmerran Contract;