A Japanese cable supplier has been hit with a hefty penalty of more than $1.3 million by the Federal Court in Adelaide after the company was found guilty of bid rigging and price fixing.
The case against Viscas Corporation followed action by the Australian Competition and Consumer Commission after it was discovered in September 2003 that Viscas reached an anti-competitive arrangement with other Japanese and European suppliers of land cables.
The companies organised an agreement so the European suppliers would submit the lowest price. Viscas acknowledged this arrangement originated from an overarching agreement in relation to the allocation of projects involving the Japanese and European companies.
Viscas was fined a total of $1.35 million. Justice Lander of the Federal Court also ordered the company restrain from engaging in similar conduct for a period of three years and pay a contribution to the ACCC’s legal costs.
SmartCompany contacted Viscas for comment but received no response prior to publication.
ACCC chairman Rod Sims said in a statement the companies engaged in “cartel conduct” which can disadvantage local businesses.
“Cartels damage the economy, often raising prices for local businesses and consumers, and hurting those businesses that play by the rules. It is crucial for the ACCC to continue to tackle cartel conduct, whether Australian or foreign based, with the full force of the law,” he said.
TressCox Lawyers partner Alistair Little told SmartCompany the case judgement is “unsurprising”.
“Whenever you have bid-rigging, it clearly has an impact on competition, the consumer looks like they’re getting a range of tenders, but the companies are fixing the prices among themselves,” he says.
Little says these cases are not common, but when they happen, the courts do not look upon them lightly.
“For what was a one-off conduct, a very significant penalty was awarded. This conduct is not so common now because the message is out there, but it is not easy to pick up through individual probings. It tends to become more apparent over time.
Little says it most often occurs in small markets where there are only three to four main players and in cases where price fixing is picked up from a single incident, a whistle-blower is often the one who alerts the authorities.
Lander said in the judgement because price fixing and bid rigging behaviours are hard to detect, the penalties should be significant enough to deter other businesses from engaging in similar conduct.
In October last year, Emirates paid $10 million as part of an ACCC case against international airlines for alleged price fixing of fuel and other surcharges.
Little says despite Viscas being a foreign company, it would have been aware its behaviour was “problematic in a lot of jurisdictions”, with the Australian laws being similar to those in Europe and the United States.
“If businesses are operating in the Australian market, it’s their responsibility to abide by Australian laws,” he says.