Australia: competition body seeks higher Cement Australia fine

The Australian Competition and Consumer Commission (ACCC) has appealed against a court ruling imposing fines of AUD18.6m (US$14m) on Cement Australia, one fifth of the level the ACCC had asked for.

In September 2013 Cement Australia was found guilty of conspiring to prevent competition in the concrete market when it entered into contracts with power stations in southeast Queensland to acquire fly ash.

On 29 April 2016, Australia’s Federal Court levied a fine of AUD18.6m on the company and subsequently set aside AUD1.5m of this, reducing the penalty payable to AUD17.1m. The ACCC had advised the court that a fine of AUD90m would be appropriate given both with regards to the benefit Cement Australia had derived from the arrangements and to deter instances of collusion in future.

Commenting on the appeal, ACCC Chairman, Rod Sims, said: “The ACCC will argue to the Full Court that the penalties imposed on Cement Australia are manifestly inadequate, and not of appropriate deterrent value.

“The penalties imposed in competition cases are hugely important in deterring anti-competitive conduct. The ACCC considers it essential that penalties for anti-competitive conduct in breach of the law are fixed with a view to ensuring that they are not regarded by businesses as being an acceptable cost of doing business.

“In this case Justice Greenwood found that the conduct deprived the market of engaging with a new entrant who would have provided competition that would compete away inefficient costs and service offerings, with a likely significant effect on prices”.