ACCC Enforcement and Compliance Project: The Impact of ACCC Enforcement Activity in Cartel Cases

Abstract

The Centre for Competition and Consumer Policy's (CCCP) Australian Competition and Consumer Commission (ACCC) Enforcement and Compliance Project uses qualitative and quantitative research methods to evaluate the impact of ACCC enforcement strategies on compliance with the Trade Practices Act. This Report provides a preliminary analysis of the compliance impact of ACCC enforcement activity in cartel cases. The Report examines four case studies of significant ACCC cartel enforcement action in detail using empirical evidence from interviews with ACCC staff, lawyers and business people involved in each case, and documentary reports of the case and its impact. The four cases are the Freight, Concrete, Transformers and Queensland Fire Protection cases. Each case was chosen because of its significant impact on industry compliance and on the reputation and effectiveness of the Commission, according to preliminary interviews with ACCC staff. The analysis shows that each case did have significant impacts, but also weaknesses. In all four cases the ACCC followed the same pattern of investigation and enforcement, with relatively minor variations. These are the use of informers and leniency/immunity, the section 155 process for gathering evidence, negotiated settlements of enforcement action, the publicity associated with proceedings, and implementation of compliance programs as a remedy for misconduct. Despite failures in the impact of both the ACCC's deterrent and moral messages, the data suggests that ACCC enforcement activity has significantly influenced a change in social norms in Australian business related to cartel behaviours through a mix of enforcement techniques that have begun to extend a web of control over market behaviour. Available at http://www.cccp.anu.edu.au/projects/cartelreport.pdf