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Program Manager: Dr Barbora Jedlickova

Participants: Prof Mark Furse from the University of Glasgow, Assoc Prof Jonathan Crowe

 

The Cartel Program is the first CPICL program in the area of comparative competition law. It investigates differences between cartel regimes in Australia, the European Union (‘EU’) and the United States of America (‘US’). In particular, it focuses on proving the existence of prohibited anti-competitive concertation in cartel regimes in Australia, the EU and the US and the evidence that may be used to this end. Both the relevant US and EU regimes are well based and older than the anti-cartel regime existing in Australia. Comparing the Australian practice with the EU and US practices can offer a useful reflection on the standards applied in the Australian approach. This project involves the survey of this issue in the context of the relevant legislation, the application of the legislation through decisions of implementing administrative authorities and case law of the courts, and in the light of relevant economic theories. The main focus will be on the detailed analysis of the relevant cases.

At this stage, the participants of the program assume that the the level of proving the existence of anticompetitive concertation in cartels in Australia, specifically, the existence of contracts, arrangements and understandings is set too high. This weakens the operation of the Australian Competition and Consumer Act 2010 (Cth) and undermines its purpose, which in part is to ‘enhance the welfare of Australians through the promotion of competition’ as provided in s 2 of the Act. Furthermore, the boundaries between those forms of anticompetitive concertation and also between them and lawful (pro-competitive) conduct are not absolutely clear, raising the danger that pro-competitive behaviour may be dampened. The program will explore the differences and similarities of the US, EU and Australian approaches in this matter. At its final stage, conclusions will be drawn and recommendations will be made as to how the relevant legislative provisions may be most effectively implemented and enforced and the approach(es) or even legislation changes required to ensure the highest possible protection against cartels and to the maximum enhancement of welfare.

Methodology and Research Questions

This program is based on comparative, legal-doctrinal and partially historical methodologies and it will answer the following questions:

  • What are the significant differences between the cartel regimes in Australia, the EU and the US?
  • What are the differences and similarities between proving the existence of prohibited anti-competitive concertation in the Australian cartel regimes and in the EU and US cartel regimes?
  • Do these differences enhance competition or are they detrimental to competition?
  • Generally, is the standard for proving the existence of prohibited anticompetitive concertation in cartels well-balanced? If not, why and what should be changed?
  • What recommendations can we make to improve the existing cartel regimes?
  • What is the justification for prohibition of cartels from a morality perspective?

Legislative Background

The Australian Competition and Consumer Act 2010 (Cth), Part IV, contains provisions relating to ‘restrictive trade practices’. The Trade Practices Amendment (Cartel Conduct and Other Measures) Act 2009 (Cth) amending the ACCA introduced another cartel regime and thus, the ACCA now contains several cartel regimes; specifically, Division 1, ss 44ZZRA to 44ZZRV, and Division 2, s 45(2). These cartel provisions are somewhat lengthy in comparison with the text of articles 101 and 102 of the Treaty on the Functioning of the European Union (‘TFEU’) and ss 1 and 2 of the Sherman Act 1890, which together form the basis of two nearly complete systems of competition (antitrust) law. Nevertheless, all these regimes have one essential aspect in common. Irrespective of which of the Australian regimes is applied, the existence of multilateral/bilateral anti-competitive conduct in the form of a contract, arrangement or understanding must be proved before the courts. Section 1 of the US Sherman Act requires that the anticompetitive concertation takes one of the following forms: a contract, combination in the form of trust or otherwise, or conspiracy. Article 101 of the TFEU requires an agreement, concerted practice or a decision by associations of undertakings. All three systems therefore ultimately require a possibility to prove that some form of multilateral anti-competitive conduct exists. However, the terminology and requirements for evidence are not necessarily the same, giving rise to the possibility that what may be condemned as concertation in one regime is permitted in another. Given all three regimes are based on the same essential economic underpinnings and theory such inconsistencies in outcomes are a matter of concern.