Competition and Consumer Act 2010 (Cth)
Section 45AG
Giving effect to a cartel provision
Offence
(1) A corporation commits an offence if:
(a) a contract, arrangement or understanding contains a cartel provision; and
(b) the corporation gives effect to the cartel provision.
Note: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.
(2) The fault element for paragraph (1)(a) is knowledge or belief.
Penalty
(3) An offence against subsection (1) is punishable on conviction by a fine not exceeding the greater of the following:
(a) $50,000,000;
(b) if the court can determine the total value of the benefits that:
(i) have been obtained by one or more persons; and
(ii) are reasonably attributable to the commission of the offence;
3 times that total value;
(c) if the court cannot determine the total value of those benefits—30% of the corporation’s adjusted turnover during the breach turnover period for the offence.
Pre-commencement contracts etc.
(4) Paragraph (1)(a) applies to contracts or arrangements made, or understandings arrived at, before, at or after the commencement of this section.
Indictable offence
(5) An offence against subsection (1) is an indictable offence.
Previously numbered 44ZZRG
Location: Part IV, Division 1, Subdivision B - Offences
View official version at Federal Register of Legislation
Legislative history
Amended Treasury Laws Amendment (More Competition, Better Prices) Act 2022
Paragraph 45AG(3)(a)
Omit “$10,000,000”, substitute “$50,000,000”.
Paragraph 45AG(3)(c)
Repeal the paragraph, substitute:
(c) if the court cannot determine the total value of those benefits—30% of the corporation’s adjusted turnover during the breach turnover period for the offence.
Amended Competition and Consumer Amendment (Competition Policy Reform) Act 2017 (Act 114 of 2017)
The content of this provision did not change - it was simply renumbered.
Introduced by Trade Practices Amendment (Cartel Conduct and Other Measures) Act 2009
Operative: 24 July 2009
Commentary
History
The insertion of this provision was part of the package of reforms introducing criminal penalties for cartel conduct. The reforms also created a parallel civil cartel prohibition, replacing the former s 45A which dealt directly with price-fixing.
The reforms were initially recommend by the Dawson Committee as part of its 2002-2003 inquiry into the Competition Law provisions of the Trade Practices Act.
Consideration by the courts
The fault elements (s 45AG(2))
The fault element is the only distinguishing feature between the criminal and civil prohibitions on cartel conduct (in ss 45AF and 45AG (criminal) and 45AJ and 45AK (civil)).
The fault element in s 45AG is knowledge or belief in relation to the existence of a cartel provision in a contract, arrangement or understanding. When read with the Criminal Code this it must be demonstrated that the the corporation intendedto give effect to a cartel provision.
In CDPP v Nippon Yusen Kabushiki Kaisha [2017] FCA 876 Justice Wigney noted [note the judgement was handed down prior to the renumbering of the provisions in November 2017]
[para 173] Subsection 44ZZRG(2) provides that the fault element for paragraph (1)(a) is knowledge or belief. That simply means that, in accordance with the general principles of criminal responsibility set out in Chapter 2 of the Criminal Code Act 1995 (Cth), it is necessary to prove that the corporation knew or believed that the relevant contract, arrangement or understanding contained a cartel provision. No fault element is specified in relation to paragraph (1)(b). It follows that the fault element for the conduct in that paragraph is intention: s 5.6 of the Criminal Code. It must accordingly be proved that the corporation intended to give effect to the cartel provision. It should perhaps be noted in this context that these fault elements are the only difference between the criminal offence created by s 44ZZRG and the civil penalty provision concerning giving effect to a cartel provision in s 44ZZRK. Section 44ZZRG(5) provides that an offence against subsection (1) is an indictable offence.
More information
See further information and resources on the cartel page.
Last updated: 23 November 2022