John Durie: ACCC’s criminal cartel case record remains mixed, while civil cases bring more success

The Australian Competition and Consumer Commission (ACCC) has a decidedly mixed record in its criminal cartel cases, with the latest being the Vietnamese money case that saw charges dropped against the only defendant who challenged the proceedings.

The ACCC trumpeted the case as a victory because four other defendants pleaded guilty, which meant, for the first time since the law came into effect, it won suspended jail terms for alleged price fixing.

But when the cases were challenged, as with one defendant in this case, the ANZ bank case and Country Care litigation, the Commonwealth Director of Public Prosecutions (DPP) either lost or dropped charges before heading to court.  

The ACCC is finalising a review of the criminal cartel provisions in the wake of the ANZ debacle and is unlikely to recommend changes to the law, with better case selection being the preferred solution. This means more complex cases maybe best handled in civil cases.

There is, however, a strong view within the Law Council that two things need to happen: the law simplified and a uniform process for pre-trial commitments with different states having different laws.

While there are different views on the law, there is unanimity on the need for criminal cartel provisions to provide the deterrence to big company bosses who regard fines as lunch money, but personal jail time as something to be considered seriously.

“Limited” evidence

In the Vietnamese matter, it was alleged that between 2012 and 2016, directors of Sydney-based Vina Money and Melbourne based Hong Vina agreed on exchange rates on $2.5 billion worth of trade between the Australian dollar and Vietnamese Dong,  and agreed to charges for the money exchanges.

The allegation allegedly included talks with Sacombank.

Four directors pleaded guilty, but one challenged the case, and last week the DPP dropped the case against that director.

The suggestion was the evidence against the different individuals was not the same.

But legal publication Lawerly quoted the defence lawyer Adam Ly as saying “their [the ACCC] evidence was very limited particularly to a meeting with a witness which the case relied on to establish there was an agreement”.

He noted: “It’s been notoriously difficult for the prosecution to prove a contract, arrangement or understanding. I think that is where they had problems.”

Ly added the ACCC was “somewhat lucky to stumble across the evidence that formed the basis of the case in the first place”.

A mixed record

Criminal prosecutions are handled by the DPP for the ACCC.

In June 2021 the first criminal case against Country Care (the zimmer frame case) ended in an acquittal, and earlier this year the DPP withdrew all changes in the ANZ cartel case.

A Law Council conference on the weekend looked at the track record with some suggestions of “possible avenues for reform in light of the complexity of the legislative provisions for a jury”.

The response was aimed more at better case selection from the ACCC on which cases to take the criminal route, which requires a higher hurdle to prove the complaint. 

In her address to the conference ACCC chief Gina Cass-Gottlieb stressed the campaign against cartels was going strongly, noting a string of civil cases.

“A steady stream of cases is the best approach for disrupting and deterring unlawful conduct,” she said.

That being so, the mixed record in criminal cases is an issue.

Cass-Gottlieb talked up her enforcement role saying “competitive, informed and (in the case of essential services) well-regulated markets are even more important to achieving competitive prices, better quality products and services and more choice”.

She noted the ACCC was upgrading its “ intelligence and analytical capabilities through a dedicated Intelligence team and a Strategic Data Analysis Unit which provide significant support to a cartel enforcement program”.

Cass Gottlieb continued: “Our economy and community are facing the impact of global and domestic supply chain disruption from the COVID-19 pandemic, climate change and the war in Ukraine and a range of inflationary pressures. As we are all experiencing, these factors are driving up the cost of living for households in staples like energy, food and fuel.”

The Law Council Competition and Consumer workshop is an annual event focusing on the key competition law issues at which the ACCC chief lays down her agenda.

At month’s end all eyes will turn to the ACCC’s recommendations on suggested new laws to combat abuse of market power by digital platforms.