In broad terms, a cartel exists where two or more businesses that should be competing with each other agree to co-operate, for example on pricing or markets, rather than act independently.
The ACCC has focussed on this area with the recent enforcement results including:
o eight petrol companies in regional Victoria were fined $22.5 million for their involvement in a long-standing arrangement to fix retail petrol prices. Eight executives were also fined a total of more than $800 000, with two executives being fined $200 000 each for their involvement in the conduct.
• George Weston Foods – where a former divisional chief executive telephoned a competitor seeking to fix the wholesale price of flour. Even though the competitor did not agree to the scheme, George Weston was fined $1.5 million.
• Metro Bricks, which agreed in phone calls and meetings with its rival Midland Bricks simultaneously to lift the price of bricks by three per cent, and set a floor price for tender pricing for major builders (in Western Australia), was fined $1 million. The agreement was exposed when Boral, the parent company of Midland, voluntarily came to the ACCC to take advantage of its leniency policy. In so doing, Midland escaped financial penalty while its co-conspirator was fined $1 million.
The ACCC has published a new guide: Cartels- what you need to know.