Company executives found guilty of price fixing and other cartel offences could face jail terms up to 10 years under strict new legislation released by the Federal Government.
Company executives found guilty of price fixing and other cartel offences could face jail terms up to 10 years under strict new legislation released by the Federal Government.
The new cartel laws will also hand much stronger powers to the Australian Competition and Consumer Commission to uncover price fixing and collusion, including the ability to tap the phones of suspect executives.
The legislation calls for maximum 10 year jail terms for individuals found guilty of price collusion, or a maximum $220,000 fine.
Corporations will face fines of $10 million or three times the value gained from the cartel, whichever is greater.
Assistant Treasurer Chris Bowen says the laws make good on a promise by the Rudd Government to criminalise cartel behaviour.
“We have always said that a jail term for cartel offences sends a clear message – price fixing is theft from consumers, and won’t be tolerated in this country,” he says.
“Cartel conduct harms consumers, businesses and the economy. People who operate cartels are thieving from the community – it is corporate theft.”
But business group are unlikely to be happy with the Federal Government’s decision to remove the so-called “dishonesty defence”, which allowed those accused of price fixing to argue they had not intentionally engaged in collusion.
The Australian Industry Group and Business Council of Australia had previously argued this defence should be retained.
“While we are not opposed to the principle of imposing criminal sanctions on serious cartel conduct, the potential is that the new penalties may push companies into taking an overly cautious approach to normal commercial arrangements,” AIG chief Heather Ridout told The Australian Financial Review.
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