Cartel – Who, Me?

If you have any contract, arrangement or understanding with a competitor, it could well be that you are engaging in illegal cartel conduct.  It does not have to be a formal binding contract – an “arrangement or understanding” is sufficient.   And if it’s about charging the same prices, allocating customers, limiting production capacity or has to do with a tender, the anti-cartel laws in the Competition and Consumer Act 2010 (Cth) are likely to be triggered.

This prohibition, law since 2010, can apply in some surprising situations.  For example, a supplier grants exclusive distribution rights to a reseller but reserves the right to sell itself in the relevant territory.  Two competitors settle a trade mark dispute and agree to “keep off” certain products with their trade marks. A trade association (in a classic “hub-and-spoke” arrangement) sends its members an exhortation to charge a certain amount or calculate charges in a certain way…

The penalties are severe for both companies and company officers involved.  In some cases, there may be a way to obtain immunity from prosecution, or to adopt other alternative approaches.  Whatever is the case, it’s always best to get advice early – and Hodgkinson McInnes Legal can help:  read about our Competition and Consumer  legal services.