Crane Companies Caught in a Cartel by the Consumer Commission

The Federal Court has ordered a crane company operating in Newcastle and the Hunter to pay $1 million for entering into a cartel agreement with a competitor after the ACCC launched proceedings in October 2020. The facts of this scenario may seem quite innocent but as you can see, the businesses involved have received massive fines.

NQ Cranes admitted to signing a ‘distributorship agreement’ in 2016 with MHE-Demag which provided the two competitors wouldn’t target each other’s current customers in parts of Queensland and Newcastle.

The agreement also provided for co-operation in the crane servicing market by focusing on competing against other companies in the industry, rather than each other.

‘Market sharing’ is classified as cartel conduct and occurs when competitors agree to divide the market between themselves. This could include agreeing to avoid producing the goods or services of the other competitor, serve different geographical areas, divide contracts by value or assign customers to each competitor.

ACCC Commissioner Liza Carver said the written agreement to share the market was clearly anti-competitive and had the potential to limit the service options available to businesses in the Hunter region. She said, “businesses are reminded that the ACCC will investigate and take appropriate enforcement action not just against large corporates or multinationals.”

The Competition and Consumer watchdog investigates cartel conduct and can initiate civil proceedings in the federal court, like the current case, or refer serious cartel conduct to the Commonwealth Director of Public Prosecutions (CDPP).

The ACCC can also detect cartels through education programs, gathering proactive intelligence and data assessment, and also working with overseas counterparts.

The immunity program allows past or present cartel members to confess and cooperate with investigations for immunity from civil and criminal proceedings brought by the ACCC or the CDPP.

For more information on cartels and the immunity process you can visit the ACCC website.

At Osborn Law our Commercial team has substantial experience in negotiating terms and reviewing agreements particularly regarding Consumer Law and Anti-competitive behaviour.

If you would like more information on the above or to discuss specific matters relevant to your company or a company you’re dealing with, please contact us at 02 4927 2900