Book Review: Australian Cartel Regulation: Law, Policy & Practice in an International Contex
| Date | 01 December 2011 |
| DOI | 10.1177/0003603X1105600407 |
| Published date | 01 December 2011 |
| Author | Terry Calvani |
| Subject Matter | Book Review |
AUSTRALIAN CARTEL REGULATION: LAW, POLICY
& PRACTICE IN AN INTERNATIONAL CONTEX
Caron Beaton-Wells & Brent Fisse
Cambridge University Press (2011), 618 pp., £110.00
Reviewed by Terry Calvani, of Counsel, Freshfields Bruckhaus Deringer LLP US*
I.
INTRODUCTION
In 2009, Australia joined those jurisdictions that criminalize cartel
conduct, through the amendments to the Trade Practices Act 1974
(the Act).1 Caron Beaton-Wells, a professor of law at the University of
Melbourne, and Brent Fisse, a practicing lawyer and a member of the
adjunct faculty of the University of Sydney, have written a volume
devoted to cartel regulation in Australia generally but with a focus on
this change in Australian law.
The volume is an in-depth treatment of Australian cartel law. It
seeks to “explain in detail the main features of Australia’s cartel
regime, and identify and discuss key issues of formulation, interpre-
tation and application.”2 In doing so, the authors draw on interna-
tional experiences and often draw comparisons. Thus the volume is
* Former Member, Board of Directors (holding the criminal cartel port-
folio), An tÚdarás Iomaíochta (The Competition Authority of Ireland)
(2002–05); Commissioner, United States Federal Trade Commission
(1983–2000).
AUTHOR’S NOTE: I wish to thank Diane Tuomala for her superb assistance in the
preparation of this review.
1
Trade Practices Amendment (Cartel Conduct and Other Measures)
Bill 2008. Canada, Estonia, Ireland, Israel, the Republic of Korea, Japan, Mex-
ico, Russia, the United States, the United Kingdom, and now Australia crimi-
nalize price fixing. See generally Terry Calvani & Torello Calvani, Cartel
Sanctions and Deterrence, 56 ANTITRUST BULL. 185 (2011).
2
CARON BEATON-WELLS & BRENT FISSE, AUSTRALIAN CARTEL REGULATION:
LAW, POLICY & PRACTICE IN AN INTERNATIONAL CONTEXT (2010).
© 2011 by Federal Legal Publications, Inc.
922 : T H E A N T I T R U S T B U L L E T I N : Vol. 56, No. 4/Winter 2011
both descriptive and analytical, yet it does not purport to be encyclo-
pedic. For example, the book does not explore the underlying policies
for either the proscription of cartels or their criminalization, nor does
it seek to describe either the investigative or adjudicative processes. It
is as the authors state: a comprehensive account of the Australian
treatment of cartels.
Specifically, the authors address the legal framework of the law
including the important issues posed by dual criminal and civil treat-
ment of cartel conduct in Australia. The duality requirement is
explored, including proposals to define “understanding” to encom-
pass tacit collusion. The authors also critically examine the statutory
definitions of particular forms of cartel conduct. Issues of fault and
intention are explored in both civil and criminal contexts. Individual
and corporate liability are discussed. The book concludes with exami-
nations of the exceptions to the law, the respective roles of the
national competition authority—the Australian Competition and
Consumer Commission (ACCC)—and the public prosecutor, and the
implications of the law on private enforcement and issues posed for
competition law compliance.
The book is not for the shelves of every competition lawyer and is
tailored for those who practice in Australia. That is not to say that for-
eign competition lawyers would not find it of interest; rather, it is to
acknowledge that the treatment of the issues is very thorough. A light
read it is not. But for those seriously interested in Australian competi-
tion law, it should be on the acquisition list.
II.
THE STATUTORY FRAMEWORK
The authors criticize the process that produced the legislation as
“marked by secrecy, obfuscation and delay.”3 Their description of the
course of the bill through Parliament certainly fits their characteriza-
tion. However, it is not for a foreign observer, generally unfamiliar
with the Australian legislative process, to pass judgment on the fair-
ness of this conclusion.4 Rather, this review focuses elsewhere. More
3
BEATON-WELLS & FISSE, supra note 2, at 4.
4
It is to be noted, however, that I was asked by the Australian Govern-
ment to come to Australia House in London in 2003 to discuss the proposed
BOOK R E V I E W : 923
interesting to the non-Australian is the authors’ point that many
important issues were not examined and that “there is considerable
uncertainty as to how the provisions are to be interpreted and
applied.”5
At the start, some history is necessary. Prior law contained a civil
per se prohibition against price fixing and certain exclusionary con-
duct with a “catch-all” provision that forbade “provisions that had as
their purpose, effect or likely effect of substantially lessening competi-
tion.”6 The new law introduced per se prohibitions against four types
of cartel behavior: price fixing, output restrictions, market allocation,
and bid-rigging.7 Suffice it to say that the authors believe the old law
was reasonably simple while the new law is otherwise.
The authors commence their substantive discussion by focusing
on the coverage of the new law, and in that context explore issues of
federalism under the Australian Constitution. They then discuss the
territorial coverage of the legislation, noting that although prior legis-
lation contained a requirement that the prohibited conduct affect
competition in Australia, the new law contains no such requirement.
Thus, the “required nexus between the conduct that is the subject of
the offence or prohibition and competition in Australia is omitted.”8
Obviously the issue is important. At a time when competition law
best practices stress the importance of a nexus between regulation
and domestic effects, it would be inconsistent with international
norms if the omission was other than inadvertent.9
criminalization with representatives of the Australian Treasury. See Submis-
sion to the Trade Practices Act Review Committee, Parliament of Australia,
June 2, 2002, Submission No. 56 (Australian Competition and Consumer
Commission). The fact that the bill was not passed by Parliament until 2009
certainly lends credence to the point of delay.
5
BEATON-WELLS & FISSE, supra note 2, at 10.
6
Id.
7
Id. at 11.
8
Id. at 15.
9
The authors have previously remarked on the failure of the bill’s
Explanatory Memorandum to adequately explain the legislation. See BEATON-
WELLS & FISSE, supra note 2, at 10. This is clearly a good example of this
924 : T H E A N T I T R U S T B U L L E T I N : Vol. 56, No. 4/Winter 2011
On the other hand, the authors note that the extraterritorial effect
of the legislation is limited when compared with that of the United
States and the European Union.10 They suggest that the time is ripe for
an Australian debate on the issue. Although not explicitly endorsing
the American approach, the authors state that “the ‘effects’ doctrine is
arguably more effective in the context of pursuing international car-
tels.”11 Arguably “yes,” but I am not convinced that the effects doc-
trine, at least as espoused by the United States, is tomorrow’s best
model. In a world in which few antitrust agencies pursued transna-
tional cartels, the doctrine made sense. That is not today’s world.
Instead, there are over one hundred competition law enforcement
agencies today, and a significant subset—doubtless still a distinct
minority—that investigate allegations of international cartel conduct.
Tomorrow will bring a world in which many agencies chase the very
same conduct and seek at least monetary sanctions for the same trans-
actions. A preview of tomorrow is revealed by one recent case in
which the United States sought sanctions for sales made from the
United Kingdom to the Middle East and Latin America on the
grounds that some of the sales were invoiced to the United States.
When queried, U.S. Justice Department lawyers stated that they
would have taken the same position even if the only U.S. nexus was
payment for the products through an American financial intermedi-
ary. At the same time, a national competition agency in one of the
purchasing jurisdictions was looking at the very same sales. The num-
ber and frequency of such scenarios will only increase. Although the
Australian Treasury may be enriched by the additional revenue,
query whether current limitations on Australian territorial jurisdic-
tion make the world less safe from transnational cartel conduct.
defect. The authors go on to distinguish between the territorial nexus and
the conduct nexus and observe that the latter permits extraterritorial juris-
diction where there is a connection between the actors and Australia. Id. at
16. To qualify, legal entities must be incorporated or carry on business in
Australia, whereas individuals must be citizens or residents. Thus, an issue
is posed by overseas conduct that affects Australia if these requirements are
not met. Id. The authors conclude that such an interpretation would create
“an obvious and significant loophole.” Id.
10
BEATON-WELLS & FISSE, supra note 2, at 17.
11
Id. at 18.
BOOK R E V I E W : 925
Professor Beaton-Wells and Mr. Fisse then address the important
issue of where to draw the line between a criminal offense and a civil vio-
lation. Early in the process, proponents of the legislation proposed a “dis-
honesty” requirement, similar to that contained in the United Kingdom’s
Enterprise Act,12 as the distinguishing feature. Later, a new Labour Gov-
ernment eliminated the requirement and instead required certain fault
elements with reliance on...
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