The Full Federal Court has dismissed appeals by BlueScope Steel Ltd and its former general manager, Jason Ellis, leaving in place earlier findings and penalties arising from an Australian Competition and Consumer Commission (ACCC) civil cartel case.
The court upheld determinations that between September 2013 and June 2014 BlueScope and Mr Ellis sought to induce eight Australian steel distributors, and overseas manufacturer Yieh Phui, to enter agreements that would fix and raise prices for flat steel products sold in Australia. As a result, the record $57.5 million penalty imposed on BlueScope and the $500,000 penalty against Mr Ellis remain enforceable.
The ACCC had argued, and the trial judge found, that Mr Ellis and other BlueScope representatives repeatedly approached competitors seeking to insert cartel provisions in contracts. The conduct included attempts to persuade distributors to use BlueScope’s pricing information as a benchmark when setting customer prices for hot rolled coil, cold rolled coil, steel plate and other flat steel products.
BlueScope is the country’s major manufacturer of flat steel, a material widely used across construction, building, manufacturing, automotive and transport industries. The regulator said the attempted cartel, if it had succeeded, would have had the potential to reduce price competition and cause harm to customers and competing businesses.
The litigation follows a long-running investigation by the ACCC. Civil cartel proceedings were instituted in August 2019. In October 2019 Mr Ellis was separately charged with inciting the obstruction of a Commonwealth official by encouraging other employees to give false information to the ACCC; he pleaded guilty in September 2020 and was convicted and sentenced in December 2020 to eight months’ imprisonment, but was immediately released on a recognisance order.
The Federal Court first found cartel conduct by BlueScope and Mr Ellis in December 2022. In August 2023 the court imposed the $57.5 million penalty on BlueScope and the $500,000 penalty on Mr Ellis; the sum against BlueScope was described at the time as the highest penalty ever imposed in Australia for cartel conduct and for a breach of the country’s competition laws.
ACCC Acting Chair Catriona Lowe welcomed the Full Court’s decision, saying it endorsed the earlier findings and sanctions and underlined the regulator’s commitment to pursuing cartel enforcement. She reiterated that the ACCC remains focused on preventing collusive conduct that could raise prices and harm the economy.
The ACCC also reminded businesses and individuals that significant civil penalties can apply for cartel contraventions. Penalty regimes were substantially increased with effect from 9 November 2022, and civil fines for corporations prior to that date included options such as a $10 million cap, three times any benefit obtained from the contravention, or up to 10 per cent of the corporation’s Australian turnover where benefits could not be quantified. Individuals faced maximum civil penalties of $500,000 per act or omission before the changes.
The regulator urged anyone aware they may be involved in cartel conduct to consider the immunity process or to report concerns via the ACCC’s anonymous portal or contact lines.
