- We gave a paper 'Facilitating Practices, Vertical Restraints and Most Favoured Customers' at the Competition Law Conference, Sydney, 21 May 2016. See Publications. This paper explores how MFC restraints are dealt with in Australian competition law. Numerous significant issues of overreach, underreach and uncertainty emerge, both under the present law and the Harper Report.
- Brent Fisse was awarded the Gilbert Geis Lifetime Achievement Award for 2015 by the National White-Collar Crime Center and the White-Collar Crime Research Consortium in Washington, DC.
- A critique of the competition law recommendations in the Harper Review Report was presented at the NZ Competition Law & Policy Institute, 26th Annual Workshop, Auckland, 16 Oct 2015. The paper and the slides on key points are available in Publications.
- Brent Fisse gave a presentation on the Harper Review Draft Report at the CIFR Symposium on Competition Law and Policy in Australia, 25 November 2014 - the PowerPoint is available in Publications.
- We are working on competition law and policy review projects in Australia, PNG and elsewhere.
- Brent Fisse has been invited to present a paper at the CPLINZ conference in October 2015 on the Harper Review Final Report and its possible implications in NZ.
- Brent Fisse participated in the conference on the Harper Review Draft Report in Canberra 23-24 October 2014.
- The scheme of price regulation in the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 (see Sch 2 which sets out amendments to the Competition and Consumer Act) seeks to ensure that savings from the repeal of the "carbon tax" will be passed on to consumers in relation to a limited range of goods or services. However, the prohibition against price exploitation under proposed s 60C of the Competition and Consumer Act is not against failing to pass on carbon tax repeal cost savings but against an "unreasonably high price" taking into account not only the carbon tax repeal but also the supplier's costs, supply and demand conditions and "any other relevant matter". This prohibition is thus loosely defined. Given this loose definition and the wide scope for creative cost accounting and creative pricing thereby allowed, this red tape is a political sop that will do little to ensure that carbon tax repeal cost savings will be passed on to consumers. In any event the amount of the savings is unknown and may be insignificant: see Martin, 'Why cut a nearly undetectable tax?' SMH Business Day 21 Oct 2013 p 28.
- The NZ Commerce Commission has published draft Competitor Collaboration Guidelines for comment by 12 November 2013; these can be accessed at http://www.comcom.govt.nz/competitor-collaboration-guidelines. There are no comparable guidelines in Australia - the joint venture provisions in the Australian legislation are ill-designed, uncertain in scope and difficult or impossible to translate into reliable guidelines. See further Fisse "Proposed NZ collaborative activity exemption" (e-Concurrences 11 July 2013).
- The "Discussion Paper" on immunity policy released by the ACCC on 30 September 2013 is very limited in scope and analysis. It seems to be an attempt to avoid a full public review of all significant issues. The issues and the need for a full public review are canvassed in C Beaton-Wells, 'The ACCC immunity policy' (2013) 41 ABLR 171.
- The Coalition policy to amend the Competition and Consumer Act 2010 (Cth) (as announced on 3 September 2013) so as to prohibit price exploitation after the proposed abolition of the carbon tax heralds the introduction of a price regulation scheme based on the GST-related prohibitions against price exploitation under Part VB of the TPA. Part VB required complicated cost accounting by businesses large and small. It was also based on a rational actor pricing model that was out of touch with the pragmatic practical pricing practices that are typical in business. The Coalition's proposed introduction of regulated pricing is consistent with the Australian addiction to piecemeal over-reaching legislation but, if enacted, will be an enforcement and compliance nightmare. See further Fisse et ors, Price Exploitation under Part VB of the Trade Practices Act (2000) eg at p 102:
- Do companies, especially smaller companies, fully understand what Part VB will mean for their cost accounting and pricing methods? There should be no illusion that, if Part VB is to be taken as seriously as is plainly intended by the government, the pass through principle means that all companies will require precise techniques of measurement and the systems required to charge prices that reflect the new tax savings component. For most companies this will require significant changes to accounting processes and a dependency on costing data from suppliers who also need to modify their accounting processes.
- The proposed NZ collaborative activity exemption from cartel prohibitions is far superior to the economically irrational tangled mess of joint venture exceptions in Australia. Root and branch reform is required. See Fisse "Proposed NZ collaborative activity exemption" (e-Concurrences 11 July 2013).
- Much of the recent published work on anti-cartel enforcement strategy is driven by law and economics models of "optimal" enforcement the naive assumptions of which have been addressed only partly by the school of "behavioural economics". A much more fertile source of ideas on regulatory strategy is the school of responsive regulation; for a primer see J Braithwaite, "The Essence of Responsive Regulation" (2010) at: http://www.anu.edu.au/fellows/jbraithwaite/_documents/Articles/essence_responsive_regulation.pdf.
- Practical difficulty continues to arise from the lack of a related corporations exemption for resale price maintenance under the Competition and Consumer Act. This deficit is out of whack with the related corporations exemptions that apply to cartel-related conduct under the Act and the single economic unit principle under US antitrust law. It is also inconsistent with s 44(1A) of the Commerce Act (NZ). This anomaly has been a known problem for ages but has yet to be addressed by Australia's slovenly competition law makers.
- The NZ Commerce Committee has reported back on the Commerce (Cartels and Other Matters) Amendment Bill - see the report and revised Bill at: http://www.parliament.nz/en-NZ/PB/SC/Documents/Reports/0/8/4/50DBSCH_SCR5848_1-Commerce-Cartels-and-Other-Matters-Amendment-Bill.htm The proposed cartel legislation seeks consciously to avoid the complexity and other design failures of Part IV Div 1 of the Competition and Consumer Act (the Australian Treasury has no apparent competence at competition law and policy development). We have prepared a comparative table of the main features of the cartel provisions of the Commerce Act under the proposed amendments and those of the Competition and Consumer Act - to be published in LexisNexis Competition and Consumer Law News (June 2013). The conclusion is that the NZ model is better than the Australian attempt in a number of significant ways. Fisse, "Proposed NZ Anti-Cartel Law - Key Point Comparison"
- The introduction of deferred prosecution agreements (DPAs) under the Crime and Courts Act 2013 (UK) is an interesting development that awaits due debate in Australia. We are preparing a briefing paper for clients on the pros and cons of the DPA model developed by the US Department of Justice long ago and the latter-day UK variant of that model.
- Son of Frankenstein? The future possible reform of Australian competition law signalled by the Coalition has been called the "Son of Hilmer" review. Much more is required than a re-run of the Hilmer review, which did not address or resolve numerous major issues and the gaps were not filled by the subsequent widely criticised Dawson Committee review. In the area of cartel conduct, see further Beaton-Wells & Fisse, Australian Cartel Regulation (2011) esp ch 13.
- The primitive nature of the SLC test has survived a number of recent genuflectory commentaries. The leading attempt to do much better remains T Leuner, ‘Time and the Dimensions of Substantiality’ (2008) 36 ABLR 327. The thrust and implications of that paper have yet to be adequately recognised let alone developed further in ways that would facilitate their practical application.
- In April 2013 Brent Fisse co-taught Cartels 2013 in the post-grad program at Melbourne Law School with Caron Beaton-Wells.
- New Lexpert mobile cartel detection squad.
- We are currently advising several executives in relation to potential cartel liability.
- Third line faucet - s 47(6) and (7) continue to spout their sulphurous bore water. As many commentators have pointed out over the years, the per se prohibition against third line forcing should never have been enacted. However, no sign of repeal has bubbled up from the septic lagoon of Canberra.
- We acted for Universal Music in seeking clearance by the ACCC of the acquisition of EMI recorded music. Unconditional clearance was granted on 17 September 2012. Conditional clearance was granted by the EC on 21 September. The US FTC announced on 21 September that it did not propose to take action to prevent the merger.
- We have been busy over the past 6 months on several competition law projects. Details are confidential and likely to remain so.
- We are exploring the implications of LIBOR-related antitrust suits overseas for similar possible alleged breaches of the Competition and Consumer Act.
- The Competition and Consumer Amendment Bill (No 1) 2011 on information disclosure was passed by the Senate on 24 November 2011 without debate. As we have commented throughout the past year, this legislation is misconceived (it represents international worst practice) and the smorgasbord of salmonella-laden exceptions is not an effective cure. For example, one unfit exception is that for private information disclosure made 'in the ordinary course of business' (s 44ZZW(c)). Uncertainty surrounds what this wording means in the context of information disclosures between competitors: see Fisse & Beaton-Wells, 'The private disclosure of price-related information to a competitor "in the ordinary course of business"' (2011) 39 ABLR 367. Contrary to wishful and loose thinking in some quarters, there is no reason to assume that it means 'for a legitimate business purpose' - see the Revised Explanatory Memorandum at [1.68] and [3.54]-[3.57]; and Fisse & Beaton-Wells, (2011) 39 ABLR 367 esp at 376-7. Nor is there any reason to assume that exceptional or unusual conduct that is not anti-competitive will be taken to qualify as conduct in the 'ordinary' course of business. The result is a dense fog that defies purposive interpretation - s 44ZZW(c) is political vapour and has no apparent policy substance.
- The NZ Govenment introduced the Commerce (Cartels and Other Matters) Amendment Bill 341-1 (2011) on 13 October 2011. This legislation is much simpler and markedly better than the 2009 Australian cartel amendments. The Bill is available at: http://www.legislation.govt.nz/bill/government/2011/0341/latest/viewpdf.aspx?search=ts_bill_commerce+(cartels+and+other+matters)_resel&p=1
- We have been engaged to advise on competition policy in relation to smart metering.
- The Labor Government seems to have lost due sense of the healthy Australian aversion to bullshit: see B Fisse, 'Misleading, Deceptive and Bankrupt: The Second Reading Speeches on the Competition and Consumer Amendment Bill (No 1) 2011' (24 Sept 2011) and 'RISible: The Regulation Impact Statements on the Competition and Consumer Amendment Bill (No 1) 2011' (October 2011) - Publications.
- The effect of s 44ZZRC is not always correctly understood. In Miller, Australian Competition and Cnsumer Law Annotated, 34th ed, 2012, p 528 it is said that s 44ZZRC will draw related corporations 'into the group of potential defendants', the suggestion being that a related corporation is thereby liable for a contravention of eg s 44ZZRF by another related corporation. However, s 44ZZRC does not have that effect. A related corporation is deemed to be a party to a contract, arrangement or understanding only for the purpose of the definition of a cartel provision in s 44ZZRD. The operation of s 44ZZRC is limited to the purpose/effect condition under s 44ZZRD(2) and the purpose condition under s 44ZZRD(3). Thus, for liability under s 44ZZRF, it must be established that the defendant corporation made the alleged contract or arrangement or arrived at the alleged understanding and did so with the requisite fault (intention in relation to the making or arriving at of the contract, arrangement or understanding, and knowledge or belief that a cartel provision was contained in the contract, arrangement or understanding). Related corporation A may be liable for the conduct and state of mind of related corporation B but liability for the conduct and state of mind of another person is governed by s 84, not s 44ZZRC. See further B Fisse, 'Untenable Interpretations of Australian Legislation on Cartel Offences; The Missing 44ZZ?? File' (2011) - Publications.
- 'Optimal deterrence' theory is often invoked in discussions of penalties against corporations, especially in the US, but the theory is no more convincing for being repeated by accolytes. There is no future in tossing all the eggs of organisational behaviour and all the relevant enforcement strategies into the basket of optimal incentives for rational actors: see J Byrne & S Hoffman, 'Efficient Corporate Harm: A Chicago Metaphysic' in B Fisse and P French (eds), Corrigible Corporations and Unruly Law (1985) (2 mb); B Fisse and J Braithwaite, Corporations, Crime and Accountability (1993) ch 3; C Beaton-Wells and B Fisse, Australian Cartel Regulation (2011), 198-9, 425-428; and B Fisse, 'Cartel Offences and Non-Monetary Punishment: The Punitive Injunction as a Sanction against Corporations' in C Beaton-Wells and A Ezrachi (eds), Criminalising Cartels (2011) ch 14.
- For an interesting recent paper on behavioural remedies see S Waller, 'Access and Information Remedies in High Tech Antitrust' (2011) at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1895018
- We are working with Lexpert Publications on a range of packages on compliance and liability control. See Publications +
- Does 'purpose' in s 44ZZRD(2) and (3) and s 4D(1) exclude or include foresight of practical certainty? Is there a discontinuity between 'purpose' under those provisions and 'intention' as defined by s 5.2(3) of the Criminal Code (Cth)? What light, if any, is shed on these questions by the judgments in News Limited v South Sydney?
- A detailed analysis of s 44ZZW(c) of the Competition and Consumer Amendment Bill (No 1) 2011 has now been published in (2011) 39 ABLR 367: B Fisse and C Beaton-Wells, 'Private disclosure of price-related information to a competitor "in the ordinary course of business": A new slippery dip in the political playground of Australian competition law'. The various main possible interpretations of s 44ZZW(c) are unravelled. None is satisfactory. The candidates are:
- Type A interpretations of s 44ZZW(c)
A1 A disclosure will be in the ordinary course of business if it is of a kind that regularly or frequently occurs in businesses generally
A2 … regularly or frequently occurs in businesses in the same market as that to which the disclosure relates
A3 … regularly or frequently occurs in businesses supplying or acquiring Division IA goods or services of the type covered by a regulation under s 44ZZT that applies to the defendant
A4 … regularly or frequently occurs in the defendant's business.
- Type B interpretations of s 44ZZW(c)
B1 A disclosure will be in the ordinary course of business if it has a legitimate business justification
B2 A disclosure will be in the ordinary course of business if is consistent with acceptable business practice in the sense that it is not anti-competitive, unlawful (putting s 44ZZW aside) or unethical
- While potentially taking some of the venom out of s 44ZZW, the s 44ZZW(c) exclusion is fundamentally unsatisfactory:
- The exclusion has no cogent policy foundation. It is a last-minute political compromise and a concession to those who criticised s 44ZZW for overreach and the exceptions to s 44ZZW for being too limited or impractical.
- The exclusion raises major unresolved issues of statutory interpretation and does not achieve commercial certainty. The wording 'ordinary course of business' appears in many different statutory contexts and the case law does not indicate any satisfactory answers as to how this slogan is to be interpreted in the context of s 44ZZW(c). Nor does purposive interpretation yield any workable solutions (none of the Type A or Type B interpretations indicated above is satisfactory). The underlying problem is that, since s 44ZZW(c) lacks a cogent policy foundation, it is rudderless.
- We are preparing a detailed deconstruction and reconstruction of the SLC test in an endeavour to see what can be done to shave the fuzz off this unkempt apparition and find a less Rural approach.
- Caron Beaton-Wells and Brent Fisse have made a submission to the NZ Ministry of Economic Development on the draft cartel amendments to the Commerce Act - see Publications.
- The s 44ZZY(6) exception in the Competition and Consumer Amendment Bill (No 1) 2011 is far too narrow. For example, it does not cover the situation where material information has been announced to the ASX in compliance with Chapter 6CA and is later communicated to the public for other reasons. Assume that Bank B, an ASX listed entity, decides to wind down its operations in Australia in response to the aggressive marketing campaign of its major competitors. The exit strategy is announced to the ASX. Tom Jones, Bank B's CEO, later issues a news release about the strategy and tells the press that: "We're not loved any more. It's impossible for us to compete in this market. We've decided on a strategy of fast exit. Fortunately, this won't hurt us too much. We have good opportunities offshore. And by lessening competition in Australia we will be better off. We have significant shareholdings in the other banks. It is inevitable that they will increase their market shares and profits after we go. As indicated in our announcement to the ASX, one of our aims is to encourage them to get on with it straight away." The news release and Tom Jones' statement are reported widely in the media. Bank B has complied with s 674 of the Corporations Act. However, the prohibition under s 44ZZX will apply if, as is the position here, a substantial purpose of the news release and accompanying statement is to substantially lessen competition in the market/s from which Bank B will exit. The exception under s 44ZZY(6) will not apply because the news release and the accompanying statement by Tom Jones are not made for the purpose of complying with Chapter 6CA: they are public relations comments that are made after the fact of compliance with Chapter 6CA. The only way of immunising such public relations comments is authorisation before they are made. But the news would be very stale by the time of any authorisation.
- A glaring loophole is created by s 44ZZY(6) of the Competition and Consumer Amendment Bill (No 1) 2011, as we have pointed out on several occasions. The s 44ZZY(6) opens the way for the use of continuous disclosure as a vehicle for the use of facilitating practices without getting caught by s 44ZZW or s 44ZZX. Assume that Bank A makes an announcement to the ASX that, if any customer or potential customer finds an interest rate or fee that is lower than a rate or fee advertised by Bank A, Bank A will offer a lower rate or price and better the competitor's offer by a 5% discount on the amount quoted by the competitor. There is a significant risk that this pricing strategy (MFC Strategy) could backfire but the hope and intention of Bank A is that it will give competitors a strong incentive not to engage in price competition. The information is treated as being material by Bank A given the fuzziness of the test of materiality under s 674 of the Corporations Act. The announcement is published widely and prominently in the print media, which is free advertising expected and deployed by Bank A. Given that one substantial purpose of the announcement to the ASX is to substantially lessen competition in the markets addressed by the MFC strategy, the s 44ZZX prohibition will apply assuming that the relevant goods and services have been prescribed as Division 1A goods and services. However, if another substantial purpose of the announcement is to comply with Chapter 6CA, the exception under s 44ZZY(6) seems to apply in relation to the s 44ZZX prohibition. Under s 4F(1)(b) of the CCA, a person is taken to engaged in conduct for a particular purpose if the conduct was engaged in for purposes that included that purpose and the purpose was a substantial purpose. The wording of s 4F(1) and s 44ZZY(6) does not exclude the exception where the disclosure is made partly for the substantial purpose of substantially lessening competition or even where the dominant purpose is to substantially lessen competition. See further Fisse, 'For listed companies only - The new Australian game of price signalling and how to get around ss 44ZZW and 44ZZX by using the s 44ZZY(6) side-step' - Publications
- The design of the Competition and Consumer Amendment Bill (No 1) 2011 is flawed in many ways that keep surfacing. Check out the provisions relating to notification, and in particular the inconsistency between s 93(1) and the heading to s 44ZZY and the Notes to ss 44ZZW and 44ZZX. If there is to be a notification procedure it should apply to s 44ZZX as well as to s 44ZZW.
- We are reviewing the question of conflicting obligations that arises where an immunity application is made successfully in relation to cartel conduct and the terms of the immunity agreement require confidentiality in cirumstances where some of the information subject to confidentiality is material and requires continuous disclosure under Ch 6A of the Corporations Act. The Competition and Consumer Amendment Bill (No 1) 2011 also creates difficulties in the context of continuous disclosure - a paper on that topic was presented at a conference on 30 July 2011 and will be published later.
- The joint venture exceptions under s 44ZZRO and s 44ZZRP of the Competition and Consumer Act 2010 now look even stranger when compared with the exceptions that apply to the prohibition against private disclosure of pricing information to competitors under s 44ZZW of the Competition and Consumer Amendment Bill (No 1) 2011. In the context of syndicated loans and similar arrangements, the limited scope of the joint venture exception under s 44ZZZ(3) led to the additional exception under s 44ZZZ(3A) for disclosure relating to provision of loans etc. to the same person. See also s 44ZZZ(5)(6) (insolvency work-outs). There are no equivalent exceptions in relation to the cartel prohibitions in ss 44ZZRF, 44ZZRG, 44ZZRJ and 44ZZRK. Yet the limited scope of the joint venture exceptions under ss 44ZZRO and 44ZZRP creates much the same problem and exposure extends to criminal as well as civil liability. This inconsistency in approach highlights the fact that Australian lawmakers have failed to come up with a coherent approach to pro-competitive collaborations between competitors. They seem blind not only to their own inconsistency in approach but also to the experience in the US, the EU and Canada where exemption from cartel prohibitions does not depend on any concept of 'joint venture' but focusses on whether or not a collaboration between competitors is anti-competitive. Note the recent anti-cartel proposals of the NZ Ministry of Economic Development in its Exposure Draft (June 2011). They abandon the concept of joint venture and provide an exemption for collaborative activity where the restraint in question is reasonably necessary for the purpose of a collaborative activity and not for the dominant purpose of lessening competition. That approach (or something similar) should have been adopted in relation to s 44ZZW, s 44ZZX, and ss 44ZZRF, 44ZZRG, 44ZZRJ and 44ZZRK. Fortunately, and contrary to the possible illusion of some bureaucratic supernumeraries in Canberra, the chance of their contortions being followed in NZ or elsewhere is zero.
- The Brits continue a decade-long period of anguish about the element of dishonesty in their cartel offence. See eg A Stephan, 'How dishonesty killed the cartel offence'  Crim LR 466. That debate died in Australia in 2008 when the Coalition Government's proposed element of dishonesty was rejected. (Contrary to the assertion at  Crim LR 466, 452, the Australian cartel offences do not impose 'strict liability': fault is required in relation to each and every physical element of the offences (see further C Beaton-Wells and B Fisse, Australian Cartel Regulation. ch 5)).
- Brent Fisse conducted a seminar in Wellington on 13 July 2011 on the Competition and Consumer Amendment Bill (No 1) 2011 and its implications under continuous disclosure regimes in various jurisdictions. The Bill met with a hostile reception. One sage asked if it was a hoax. Alas, the answer had to be "No".
- 8 July 2011. The Competition and Consumer Amendment Bill (No 1) 2011 was passed yesterday by the House of Representatives. This Bill is on the lunatic fringe of international competition laws. It is pop legislation that serves little or no useful purpose. For example, it does not address the concerns raised by the ACCC in the petrol inquiry in 2007. While facilitating practices burn across the economy, our politicians (of all hues, including red, pink, blue, green and yellow) fiddle and emit other-worldly ineffectual legislative noises.
- July 2011. It appears that a deal has been struck between the Coalition and the Government on the Competition and Consumer Amendment Bill (No 1) 2011, to the effect that the Coalition will support the Bill (including the per se prohibition under s 44ZZW) if various amendments are made, including an exception for information disclosure in the 'ordinary course of business' (see HR Hansard, 6 July 2011, p 94) and another for work-outs. Adding more exceptions does not cure the fundamental failure of the Bill to address concerted practices by competitors in all sectors of the economy. Moreover, an ordinary course of business exception would be very loose unless defined and no apparent attempt has been made to define it (consider s 209 of the Australian Consumer Law, and compare s 4(4)(b) which relates to a very different context). The major problem with such an exception in the context of the Bill is that what is in the ordinary course of business might still be anti-competitive in purpose, effect or likely effect. For example, what if a competitor makes an information disclosure in the ordinary course of business but the disclosure is likely to coordinate the pricing of a competitor? Will there be any equivalent safeguard to that provided by s 209(c) of the Australian Consumer Law? If not, why not? These and other questions surface from the dung pile to which the Treasurer and his Government keep adding on the run. Such difficulties arise because of the wrong-headed policy decision that has been made to prohibit unilateral information disclosure instead of following the tried and tested US and EU approach of focussing on collusion and concerted practices.
- Brent Fisse is a panelist in a workshop in Auckland on 6 July 2011 on the recent Exposure Draft cartel provisions published by the NZ Ministry of Economic Development, and a speaker at workshops on the Exposure Draft organised by Chapman Tripp on 13 and 14 July in Wellington and Auckland.
- The NZ Ministry of Economic Development has published an Exposure Draft to amend the Commerce Act to provide for cartel offences and civil prohibitions against cartel conduct. The Exposure Draft advances relatively straightforward provisions that avoid the byzantine claptrap produced by the Australian Treasury and enacted in Australia in 2009.
- Brent Fisse and Caron Beaton-Wells made a submission to the HR Standing Committee on Economics about the Competition and Consumer Amendment Bill (No 1) 2011. The submission includes recommendations for amendments to the CCA that would achieve the desired policy objective without inflicting the
complexity, overreach and impracticality of the CCA Bill. See Publications.
- We have assisted a project concerned with the due functioning of criminal cartel trials in Australia. The first phase of this project was completed on 1 July 2011. Our work product included: (1) detailed notes on: (a) elements of liability for the cartel offences and exceptions thereto; and (b) denials of liability and procedural and evidential issues (eg joint v separate trials); and (2) a testing hypothetical (R v DRAMCO, Susan Static and Ely Eprom) prepared with the assistance of others. The hypothetical has a 7-count indictment and summaries of evidence including diametrically opposed expert economic evidence relating to: (a) the existence or otherwise of an understanding; (b) whether or not a provision in the alleged understanding had the purpose or likely effect of controlling a price; and (c) whether or not an increase in price occurred by giving effect to a price fixing provision or arose from oligopolistic interdependence or other market factors.
- Brent Fisse is to present a paper on continuous disclosure and price signalling at the LCA Corporations Workshop in July 2011 at Kingscliff, NSW. The paper is entitled: 'The Continual Regulation of Continuous Disclosure: The Competition and Consumer Amendment Bill (No 1) 2011'. The paper discusses the problems that the Bill creates in relation to continuous disclosure in Australia and overseas and sets out the main implications for compliance and liability control.
- We are underwriting the Sydney appearance of Jim Black's AlasNoAxis group at Venue 505 on 9 June 2011: AlasNoAxis at Venue 505 9 June 2011. AlasNoAxis is a star show at this year's Melbourne International Jazz Festival.
- We have recently been engaged in an interesting merger matter.
- We are advising a foreign government on anti-cartel legislative amendments.
- We continue to advise on issues of compliance arising from the Australian Consumer Law. The guidance material issued on the website for the new law is limited in various practically significant respects.
- 4 May 2011. We have carried out an extensive review of the economic literature on price signalling and information exchanges between competitors. That literature almost unanimously supports the view that prohibitions should require some form of collusion, invitation to collude or strategic market coordination (whereas the s 44ZZW prohibition requires merely private disclosure of price-related information). One outlier is the view expressed by Stephen King (http://economics.com.au/?p=6950) that s 44ZZW and the related private price disclosure provisions have 'a sensible economic base'. The view expressed by King is highly unpersuasive. First, he does not point to any support in the economic literature for focussing on private price information disclosure without also requiring that the disclosure be anti-competitive (eg because the disclosure and related conduct has the purpose, effect or likely effect of controlling pricing by a competitor in the market). Secondly, he makes no attempt to explain why s 44ZZW prohibits the exchange of historical or other price information that has no current competitive relevance. Thirdly, he endorses the use of notification as a response to the problem of overreach without attempting any cost-benefit analysis of that bureaucratic solution; such a solution is not used in the US and the EU largely because self-assessment is seen to be far less costly and no less effective. Fourthly, King does not examine the economic underpinnings of the law on information exchanges in the US and the EU but is wont to go off on some kind of frolic of his own. In short, the economic justification or otherwise of s 44ZZW and related provisions requires informed and relevant economic analysis. It should be remembered that failure by the ACCC to examine information exchanges between competitors closely enough in the 2007 petrol pricing inquiry (when King was a Commissioner) led to proposals for reforming s 45 that were so misconceived and so uninformed by leading comparative legal approaches as to be almost dead at birth. Little seems to have been learned from that fiasco.
- 4 May 2011. There are now four Regulation Impact Statements (RIS) that relate to the proposed price signalling and information disclosure legislation. The first RIS was published on 21 December 2010. Two further RIS were published on 24 March 2010 as part of the Explanatory Memorandum for the CCA Bill. A fourth RIS was published on 4 April 2011 (http://ris.finance.gov.au/2011/04/04/non-compliance-with-best-practice-regulation-requirements-%E2%80%93-anti-competitive-price-signalling-treasury/)(Take 4).
The covering statement to Take 4 says: "On 24 March 2011, the Treasurer introduced legislation to Parliament to address anti-competitive price signalling and information exchange. The prohibitions will apply to those sectors of the economy specified by regulation, and initially only to banks.
A regulation impact statement (RIS) was prepared for this legislation and was assessed as adequate. The RIS published here, however, excludes information that was contained in the RIS considered by the decision-maker, and we have assessed Treasury as not being compliant with the best practice regulation requirements at the transparency stage.
This RIS follows on from the policy RIS, which was published on 21 December 2010." By generating this dense thicket of attempted retrospective self-justification, Treasury and the Office of Best Practice Regulation have indulged themselves in merciless self-parody.
- 3 May 2011. The Government seems incapable of facing up to obvious facts about the overreach of s 44ZZW of the CCA Bill. Consider this example (as raised in Fisse & Beaton-Wells, 'The Competition and Consumer Amendment Bill (No. 1) (Exposure Draft): A Problematic Attempt to Prohibit Information Disclosure' (2011) 39(1) ABLR 28 at pp 37-8):
- Bank A offers a “hot daily interest rate” to new customers (NC) upon request. NC asks Bank A for
a quote in writing because Bank B has insisted upon that before discussing a competitive rate with
NC any further. The quote by Bank A is disclosed to NC for the substantial purpose of NC disclosing the information to Bank B. There is no exception (other than the highly bureaucratic option of notification) for private disclosure to a competitor via a
customer for the purpose of enabling the customer to compare prices and choose the best price. The EM (see para 1.43 and Example 1.3) evades this issue.
- 3 May 2011. The line between a private information disclosure subject to the per se prohibition under s 44ZZW and a disclosure subject only to the SLC purpose test under the s 44ZZX prohibition is unsatisfactory:
Amending the CCA Bill to avoid these particular outcomes may be possible but the process of amendment would need to be perpetual in order to cover myriad other possible comparable situations.
- The CEO of Bank A invites the CEO of Bank B to consider the possibility of increasing its home loan interest rates. The disclosure occurs over lunch in a hotel. The disclosure is recorded by U, an ACCC undercover agent sitting at the next table. The disclosure here is not limited to competitor B but is made to another person who is not a competitor and hence is not a private disclosure as defined by s 44ZZV(1). The disclosure is not accidental etc under s 44ZZU(4) assuming that the CEO of A is aware of U's presence but is indifferent about U being within earshot because he doubts that U will understand the significance of what is being said. Nor is the situation covered by the anti-avoidance provision in s 44ZZV(2) because the purpose of the CEO of A is not to avoid the application of s 44ZZW. U's skilful undercover work will thus turn off per se liability under s 44ZZW and require proof under s 44ZZX that Bank A had a SLC purpose.
- As in the situation above, except that the disclosure of price-related information is overheard not by U but by Graeme, a passing waiter. The CEO of A is aware that Graeme is listening but doesn’t care for the same reason as above. Presumably s 44ZZX applies but not s 44ZZW.
- As in the first situation above, except that the disclosure of price-related information is recorded by a video security camera and the recording is monitored in real time by the hotel. The CEO of A is aware that the conversation is likely to be monitored live but doesn’t care for the same reason as above. Presumably s 44ZZX applies but not s 44ZZW.
- 17 April 2011. Examples of the ludicrous overreach of the Competition and Consumer Amendment Bill (No 1) 2011 (CCA Bill) proliferate. They include:
- The CEO of bank A phones the CEO of bank B and says: "We think that your interest rates generally are too high. We will undercut you and knock you for six." This criticism by the CEO of bank A is a manifestation of aggressive competition. Remarkably, however, it is a private disclosure about the price for services charged or to be charged by bank B and therefore is caught by s 44ZZW unless notified to the ACCC.
- C and D are economists employed by competing banks E and F. They meet at a restaurant to discuss the interest rates that their banks and other Australian banks charged at various stages of the Great Depression. Their purpose is to compile the information for a forthcoming book, 'The Great Crash: The Australian Banking Experience', that they are co-authoring. C, D, E and F contravene s 44ZZW unless they make a successful notification to the ACCC. They have made a private disclosure to a competitor about a price charged as interest for the supply of services in the market. It is irrelevant under the wording of s 44ZZW that the disclosure relates to prices charged around 80 years ago. (This example is based on one given by Peter Heerey QC at a recent seminar in Sydney on the CCA Bill)
- 15 April 2011. The statement by Graeme Samuel, as reported in the AFR today at p 48, that the proposed reforms to ban price signalling in Australia are “entirely consistent” with best practice in the EU and the US is incorrect and highly misleading. There are major differences between the approach taken in the Competition and Consumer Amendment Bill (No 1) 2011 (CCA Bill) and that under EU, US and UK competition law. One fundamental difference is that the approach taken in the EU, US and UK requires collusion or strategic coordination of market conduct by competitors. By contrast, the CCA Bill does not require collusion or market coordination: for example, the prohibitions under the CCA Bill do not require an invitation to collude or an intention to induce a competitor to coordinate pricing or other conduct in the market. A second fundamental difference is that the prohibitions in the EU, US and UK apply generally and are not limited to one sector such as the banking sector. The selective and discriminatory application of the CCA Bill has been widely criticised, including by the ACCC itself. A third basic difference is that the approach to exceptions under the CCA Bill bears no resemblance to the approach taken in the EU, US and UK: the EU, US or UK do not have an authorisation or notification procedure or a series of selective specific exceptions but rely on general principles. The statutory provisions under the CCA Bill are unprecedented. If enacted, they would result in overreach, uncertainty and highly bureaucratic dependency on the processes of notification and authorisation. Far from being consistent with best practice in the EU and the US, the CCA Bill represents international worst practice on information exchanges between competitors. The main reasons, in summary, are:
It is intriguing how Australia alone has wound up with such mindless proposed legislation. Looking ahead, the way out of the mess is not to compound the errors of the CCA Bill by making more knee-jerk amendments or engaging in further propaganda but to drop the Bill and make a fresh and principled start that is in fact consistent with EU and US law.
- the CCA Bill focuses on information disclosure instead of the relevant harm or danger, which is collusion between competitors or unjustified coordination of their conduct in the market
- the focus on information disclosure instead of on collusion or unjustified coordination of market conduct is inconsistent with the approach taken in major jurisdictions with extensive experience of information exchanges between competitors and how best to regulate them (eg US, EU, UK, Japan, Korea)
- the focus on information disclosure rather than on collusion and coordination of market conduct is not supported by the economic literature on oligopolistic conduct, information exchanges or facilitating practices
- the approach taken in the CCA Bill is not based on any persuasive analysis of the perceived weaknesses in the present law or the best means of overcoming those weaknesses
- the CCA Bill adopts a sector-specific approach that is discriminatory and devoid of rational or workable criteria for determining whether or not any particular sector warrants subjection to prohibitions against information disclosure
- the prohibitions are over-reaching – they apply in many situations where the conduct is pro-competitive or harmless
- the prohibitions and the exceptions to them create considerable uncertainty for those seeking to comply with the law
- no attempt has been made to reconcile and align the prohibitions against unilateral disclosure of information with the prohibition against misuse of market power under s 46
- much doubt surrounds the efficacy of the prohibitions under the CCA Bill given the difficulties of proving contravention and the vulnerability of the prohibitions and exceptions to loopholes (eg via continuous disclosure)
- the CCA Bill relies heavily on authorisation and notification as ways of minimising the hazards of overreach and uncertainty but these mechanisms are bureaucratic, impractical, often unworkable and inconsistent with the approach taken in major jurisdictions (most notably the US, EU, UK)
- the process adopted for the development of the CCA Bill has been rushed, less than transparent (eg key legal advices to Treasury have not been have not been made available to the public), unresponsive to many of the understandable concerns made in submissions to Treasury and governed by political opportunism and propaganda.
- 25 March 2011. The Competition and Consumer Amendment Bill (No 1) 2011 introduced on 24 March 2011 by Treasurer Swan persists with the fundamentally misconceived approach taken in the Exposure Draft, subject to some tinkering around the edges. (For detailed criticisms of the Exposure Draft, see Fisse & Beaton-Wells, 'The Competition and Consumer Amendment Bill (No. 1) (Exposure Draft): A Problematic Attempt to Prohibit Information Disclosure' (2011) 39(1) ABLR 28) The approach taken is fundamentally misconceived because it does not focus on or limit liability to collusion or strategic coordination of conduct by competitors. Moreover, it adopts an industry-specific approach that is out of the dark ages. The tinkering around the edges includes reliance on a notification process (in relation to s 44ZZW) as a bureaucratic and inept way of responding to the widespread concern about the overreach of the s 44ZZW and s 44ZZX prohibitions. The Bill departs radically from US, EU and UK competition law (which focuses on and limits liability to collusion or strategic coordination of conduct by competitors); it is a freakish conception lacking any apparent pedigree in law or economics. If enacted, the main achievement of this legislation is likely to be instant notoriety as worst international practice in this area. See further 'Why the Competition and Consumer Amendment Bill (No 1) 2011 is International Worst Practice - An Illustrated Summary' (forthcoming, Publications)
- 27 March 2011. One of numerous glaring problems with the CCA Bill of 24 March 2011 is that the s 44ZZW prohibition is not subject to a competition condition corresponding to that under s 44ZZRD(4) or s 4D(2). In many situations, A and B will be competitors ‘in the market’ (see s 44ZZV(1)) but not in relation to the particular goods or services that are the subject of the private disclosure of information to a competitor alleged to contravene s 44ZZW. One such situation is that where lenders under a loan syndication agreement compete against each other in the market for loan funds but are not competitors (or potential competitors) in relation to the syndicated loan because none of them would participate in the loan except under the syndicated loan arrangement. See Beaton-Wells & Fisse, Australian Cartel Regulation (2011) at p 322. This means that A and B will have to lodge a notification to the ACCC unless the syndicated loan agreement and preliminary negotiations come within the joint venture exception under s 44ZZZ(3). The s 44ZZZ(3) exception will not apply where, as is often the case, the loan syndication agreement is structured otherwise than as a joint venture. The need for a competition condition corresponding to that under s 44ZZRD(4) or s 4D(2) was urged in submissions made to Treasury on the Exposure Draft, to no avail.
- 28 March 2011.
Treasurer Swan’s second reading speech and the Explanatory Memorandum for the Competition and Consumer Amendment Bill (No 1) 2011 gloss over the difficulties that the Bill would create if enacted. One example is what is said about syndicated loans and the s 44ZZZ(3) joint venture exception. Swan: “Depending on the circumstances, an arrangement like a syndicated loan—when banks get together to lend to a business customer—would likely fit the definition of a joint venture (sic).” The EM, Example 1.9 at p 27: "Banks A, B and C discuss pricing information for a joint
commercial lending arrangement to a potential borrower. At the
time of discussions, the borrower is not present. Disclosures made
in the course of these discussions will attract the joint venture
exception where they are made for the purposes of establishing a
joint venture in the production of a service to the borrower." However. syndicated loan arrangements typically are not structured as joint ventures, for various legal and commercial reasons. That was pointed out in eg the Westpac submission to Treasury on the Exposure Draft at pp 1-2: “Syndicated Lending Communications regularly occur between banks in the context of commercial lending arrangements (eg, negotiating club or syndicated loans). These arrangements require members of the syndicate (or potential syndicate), to discuss potential pricing terms and volume information of the proposed Facility. Banking syndicates or clubs are not Joint Ventures and therefore are not entitled to the joint venture exemption offered by section 44ZZZ(3).” Note also L Gutcho, 'Syndicated Lending' (1994) 22 International Business Lawyer 131 at 135: "... it is clear under most participation agreements that the relationship established is not a joint venture, although this argument can be made under some clumsily drafted or archaic participation agreements." Where the parties to a syndicated loan disavow that they are entering into a joint venture (as they commonly do) does s 4J operate to create a joint venture on the basis that there is an 'activity in trade or commerce' that is 'carried on jointly'? Or must the joint activity also have the features of a joint venture in the sense discussed by the High Court in United Dominions Corp Ltd v Brian Pty Ltd (1985) 157 CLR 1 at 10? If the joint venture exception under s 44ZZZ(3) and those under ss 44ZZRO and 44ZZRP were applicable where there is merely an activity in trade or commerce that is carried on jointly, the exceptions would be so broad as to create a glaring loophole: competitors could get off the hook of per liability merely by deciding to act jointly in a way that avoided competition between them. In any event, from a commercial standpoint, banks understandably would be reluctant to be put in the position of not having a joint venture under the terms of a syndicated loan agreement and yet simultaneously trying to maintain that there is a joint venture under s 44ZZZ(3) (or ss 44ZZRO and 44ZZRP). These complications would be avoided if the joint venture exceptions under s 44ZZZ(3) and ss 44ZZRO and 44ZZRP were replaced by exceptions for 'collaborative ventures' of the kind recommended in Beaton-Wells & Fisse, Australian Cartel Regulation (2011) pp 292-295.
- 1 April 2011.
What is the intended meaning of the concept of 'mere' receipt of information in the 44ZZZB exception in the CCA Bill of 24 March 2011? The EM is clueless (see para 1.145). Consider these test examples. Assume that Competitor A tells Competitor B that he is going to give B information about A’s future prices for Product X and Product Y. B does not stop A when A opens up the discussion but waits to hear the information about Product X. Is that a mere receipt of information or is B knowingly concerned in a breach of s 44ZZW if he does not immediately tell A that he is not interested and that he will be making his own independent pricing decisions? What if B waits until A has given him pricing information about Product Y as well as about Product X before telling A that he is not interested etc. Arguably in this situation B’s failure to disengage before receiving A’s pricing information about Product Y is not the ‘mere receipt of information’ and will amount to being knowingly concerned in the disclosure of pricing information about Product Y. In addition, under s 76(1)(c) B will be liable for aiding and abetting the disclosure of pricing information about Product Y: by not expressly disengaging from the further receipt of information, he has encouraged A to disclose further pricing information, in particular pricing information about Product Y. Note that if the charge is one of aiding and abetting under s 76(1)(c), the exception under s 44ZZZB does not apply - that exception is limited to s 76(1)(e).
- 3 April 2011.
The government has resorted in propaganda in its attempt to prop up the Competition and Consumer Amendment Bill (No 1) 2011 on price signalling. The propaganda includes the following statement in the second reading speech by Treasurer Swan: "The OECD’s roundtables on facilitating practices and information exchanges, in 2007 and 2010, have clearly highlighted the harm to consumers that can arise from anticompetitive price signalling.
Many stakeholders in Australia strongly agree that anticompetitive price signalling is not prevented by our existing competition law.
They have told us that this conduct is best targeted by providing new, specific prohibitions which prevent price signalling occurring." This statement is misleading, and seems calculated to mislead, in two main respects. First, it tries to convey the impression that the Competition and Consumer Amendment Bill (No 1) 2011 is somehow consistent with OECD thinking. In fact, the OECD has not recommended any departure from the approach taken under EU or US competition law. By contrast, the Bill dispenses with the need for collusion or strategic cordination of market conduct and thereby departs radically from eg the tried and tested EU concept of a concerted practice. Secondly, the statement in question tries to obsure the fact that, with the exception of the ACCC, stakeholders have expressed their strong opposition to the new-fangled focus on information disclosure that suddenly popped up in the Exposure Draft. See further 'Why the Competition and Consumer Amendment Bill (No 1) 2011 is International Worst Practice - An Illustrated Summary' (forthcoming, Publications)
- 9 April 2011. A pivotal problem with the Competition and Consumer Amendment Bill (No 1) 2011 is that it makes no economic sense to base prohibitions on information disclosure instead of on collusion or unjustified cordination of market conduct. Prohibitions defined in terms of information disclosure inevitably are very far-reaching unless circumscribed by numerous exceptions. Defining an adequate array of exceptions is difficult because there are myriad situations where information disclosure is pro-competitive or harmless. By contrast, prohibitions defined in terms of collusion or unjustified coordination of market conduct automatically exclude information exchanges that do not involve collusion or unjustified coordination of market conduct. The statement of Treasurer Swan in the second reading speech that 'Every Australian bank will be able to communicate with its customers, shareholders, market analysts, employees and other stakeholders in the ordinary course of business—just like they always have been able to do' is false and misleading. Consider these two examples of the economic nonsense and overreach of the prohibitions against information disclosure under the CCA Bill:
- Assume that bank A notifies bank B that the rate of interest for funds offered by super fund C and super fund D are the result of price fixing between C and D and gives B the evidence it has of that price fixing. A and B are in the process of negotiating separate loans from C and are about to enter into loan agreements. In this situation A has disclosed price-related information to B, a competitor in relation to the acquisition of funds from C. There is no cartel provision in any contract, arrangement or understanding between A and B and hence they are not liable for breach of s 44ZZRF or s 44ZZRJ. However, A would be liable under s 44ZZW for disclosing price-related information to a competitor unless it had previously made an effective notification to the ACCC under s 44ZZY(5). The position would be the same if A had told the ACCC separately about the price fixing and its relevance to the interest rate about to be charged by C and D before disclosing that information to B: see s 44ZZU(3). The position would also be the same if A had informed the ACCC at the same time as the disclosure of the information to B in an attempt to get around the per se s 44ZZW prohibition by making a non-private disclosure: under s 44ZZU(2)(a) and s 4F(1) the disclosure to the ACCC would be disregarded because it was made for the substantial purpose of avoiding the application of s 44ZZW. As a matter of competition policy, notification under s 44ZZY(5) is necessary as an escape route in such a case because the s 44ZZW prohibition is drafted in sweeping terms that: (a) have no cogent underlying economic rationale; and (b) defy attempts to draft workable exceptions.
- Assume next that bank A announces in the media that it intends to offer a new rate on home loans in 4 weeks time and that it is able to do so because it has managed to secure large parcels of funds from offshore at very favourable rates. A’s substantial purposes in making this announcement are: (1) to increase its market share by attracting new customers after giving them sufficient notice to be able to switch from their existing loans; and (2) to put pressure on its competitors and to drive as many as possible of them out of the home loan business. A has not discussed its plans in private with any competitors and there is no contract, arrangement or understanding between any of them. In this case A would be liable for disclosing price-related information for the purpose of substantially lessening competition in the market for home loans. Given purpose (1) and the fact that competition and consumer welfare are likely to be increased in the short term, there is no compelling economic rationale for subjecting A to liability in such a case. Note that notification is not an escape route here - to be valid, a notification must relate to conduct prohibited by s 44ZZW (s 93(3A)) and the conduct here is prohibited only under s 44ZZX. To get off the hook, A would need to apply for and be granted an authorisation.
- The recent EC Guidelines on horizontal cooperation between competitors (http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52011XC0114%2804%29:EN:NOT) offer a stark contrast to the Government's Exposure Draft on price signalling. The Guidelines are based on cogent economic thinking and offer detailed practical guidance. By contrast, the Exposure Draft is not based on any economic foundation and is an exercise in mindless overreach. Why has Australia dropped far behind international best practice in this area of competition law and policy? Why has no effort been made to benefit from the economically informed and legally practical approach adopted in Europe? Is it ignorance? Bloody-mindedness? Complacency? Poor leadership at Treasury? At the ACCC? A Treasurer who is way out of his depth in this area and/or who is desperate to hit some button on his political jukebox?
- The current Government has clandestinely emitted further signals about proposed price signalling legislation without providing the public with a detailed discussion paper reviewing the options and properly canvassing their pros and cons - see 'Banks facing price signal bans' AFR 7 March 2011 p 1. The proposals relayed second hand in the AFR bear no resemblance to the competition laws in other major jurisdictions. For example, there is no notification system of information disclosure in the US or the EU. We appear to be confronted by law-making on the run by advisers who should know much better or who are under the political spell of Wayne 'Kim' Swan or who are incompetent or all of the above. How stupid, and how dangerous.
- Officialdom continues to emit smoke signals on price signalling legislation: see AFR 4 April 2011 at p 3. The latest signals, like so many before them, look like huff, puff and guff. See further 'Why the Competition and Consumer Amendment Bill (No 1) 2011 is International Worst Practice - An Illustrated Summary' (forthcoming, Publications)
- Treasury documents obtained as a result of an FOI application by the media show that one key advice relied on in the lead up to the Exposure Draft was provided by Jill Walker in her then capacity as a LECG director; see the LECG Memorandum of 8 May 2009 in Treasury FOI Documents on Price Signalling October 2010. The advice by Walker recommended that a prohibition against concerted practices be adopted 'in line with EC law' and expressed strong doubt about the feasibility or wisdom of per se liability (see at pp 9-10). That advice was not followed in the Exposure Draft: (a) the approach taken in the Exposure Draft focusses on unilateral disclosure of information as distinct from coordination of market conduct and thus departs radically from the EU concept of a concerted practice; and (b) 44ZZW would impose per se liability for unilateral private disclosure of price-related information to a competitor. Treasury appears to have relied instead on two advices from counsel. Those advices have been kept secret under the wrap of legal professional privilege. It is unclear whether or not the Exposure Draft followed those advices or whether the advices contained qualifications or further observations that are a matter of public interest. If the Exposure Draft is in fact based on those advices, then in our view those advices are highly questionable. The fact that those advices have not been made public strongly suggests that Treasury has something to hide. This lack of transparency is hopeless. No adequate discussion paper has been provided. Treasury has chosen instead to shroud the underlying basis for the particular provisions in the Exposure Draft in secrecy. Those provisions are so flawed that it is difficult to believe that external legal advisers signed off on them. The advices (and any further advices) should be disclosed before any amending legislation is introduced. Exposure of the advices to sunlight might well result in evaporation of the Government's desperate proposals about price signalling.
- An alarming signal? - photo at launch of Labor's banking package
- We are preparing a detailed advice for clients on the application of the High Court's interpretation in News Limited v South Sydney (2003) of the requirement of an exclusionary purpose under s 4D and the exact relevance or otherwise of that interpretation in the context of the purpose/effect condition in s 44ZZRD(2) and the purpose condition under s 44ZZRD(3).
- We are preparing a detailed advice on the relevance or otherwise of counterfactual analyis when determining whether or not a provision has the likely effect of controlling a price under s 44ZZRD(2).
- Those aspiring to prepare submissions on sentence on behalf of corporations or individuals convicted of a cartel offence may wish to test themselves by considering the sentencing hypothetical prepared by Brent Fisse; see Sentencing Hypothetical - R v GOCO, Sung and Baron. For a detailed discussion of penalties and sentences for cartel conduct see Beaton-Wells & Fisse, Australian Cartel Regulation (2011) ch 11.
- OFT has announced an inquiry into e-book pricing in the UK. The agency model adopted by some publishers who have their own online retail stores raises the interesting question in Australia of whether or not a cartel provision is involved in such arrangements and, if so, whether the arrangements can be structured so as to attract the application of exceptions in a way sufficient to avoid exposure to criminal and civil liability. The potential application of s 44ZZRD to vertical supply arrangements between competitors has not been thought through adequately by the lawmakers (see Australian Cartel Regulation section 8.6).
- Australian Cartel Regulation (Cambridge University Press, 2011) by Caron Beaton-Wells and Brent Fisse was launched at Melbourne Law School on 22 February 2011. The Hon Peter Heerey QC was the main speaker.
Many leading Australian competition lawyers attended the function.
- Brent Fisse gave evidence to the Senate Economics Committee inquiry into competition in the banking sector; see Hansard, Senate, Economics References Committee, 25 January 2011, E92 ff at: http://www.aph.gov.au/hansard/senate/commttee/committee_transcript.asp?MODE=YEAR&ID=82&YEAR=2011. The criticisms made of the Competition and Consumer Amendment Bill (No. 1) 2011 Exposure Draft included the point that, contrary to representations made by the ACCC, the proposed prohibitions under ss 44ZZW and 44ZZX differ radically from the prohibitions against cartel conduct under US, EU and UK competition law:
- 'A key point .. is .. that the provisions in the Exposure Draft are very
different .. from the prohibitions that exist in the United States, under
section 1 of the Sherman Act; under the EU competition laws; and under the United Kingdom
competition laws. Contrary to the statements or suggestions made by representatives of the
ACCC this morning, the Exposure Draft provisions do not simply reflect the law in those
jurisdictions—they are fundamentally different. That is because they focus on unilateral
information disclosure and move radically away from a key requirement of collusion or, as
under the present law, a requirement of a contract arrangement or understanding. .. that is the fundamental error of the exposure draft prohibitions.'
- A submission on the Competition and Consumer Amendment Bill (No. 1) 2011 Exposure Draft was made to Treasury by B Fisse and C Beaton-Wells on 14 January 2011 - see Publications.
- A detailed critique of the Government's Competition and Consumer Amendment Bill (No.1 ) 2011 (exposure draft released 12 December 2010) by Brent Fisse and Caron Beaton-Wells was published by the Australian Business Law Review on 11 February 2011 ((2011) 39 ABLR 28). The critique is mainly to the effect that the prohibitions in the Bill have no cogent rationale and, if enacted, would result in numerous examples of unjustified overreach.
- The Government has seen fit to publish, belatedly on 21 December 2010, a "Regulation Impact Statement" in support of and as background to the Competition and Consumer Amendment Bill (No.1) 2011. This Xmas parcel (which as at 14 January remains unannounced on the Treasury webpage setting out the exposure draft) is much too little and too late. It is no substitute for the detailed discussion paper that should have been provided by Treasury long ago but has never emerged. The RIS does not address the glaring major defects in the Competition and Consumer Amendment Bill (No.1 ) 2011. A fresh start needs to be made.
Government's Competition and Consumer Amendment Bill (No.1) 2011 (exposure draft released 12 December 2010) is a major failure. It warrants ridicule.
Consider this example, among many others. Bazza, the CEO of Fifth Column, a new Australian bank, phones Gale, the CEO of one of the big four banks, and says: ‘Have you seen our new 6% home loan rate? Beat that, you bastard!’ Bazza’s competitive excess is not merely an affront to etiquette. It is contravention of s 44ZZW. It is irrelevant that Fifth Column’s 6% rate is information readily available to competitors in the market: see s 44ZZV(3). This source of ridicule has not been addressed by the Competition and Consumer Amendment Bill (No 1 ) 2011 of 24 March 2011.
- A submission has been made to the Senate Economics References Committee banking competition inquiry: see Submission (30 November 2010). That submission includes criticisms of the Coalition's problematic Competition and Consumer (Price Signalling) Amendment Bill 2010.
- We took issue with the Government and the Coalition about the absence of specific proposals on price signalling despite the importance of the changes in the wind and given the danger that significant amendments to the TPA would be introduced without adequate opportunity for public consultation and debate. See the discussion outline 'Concerted Practices and Facilitating Practices in Australia: Smoke Signals, Legislative Options and Basic Questions' (working draft 18 Nov 2010). See also 'Cheap Talk about Price Signalling by the Shadow Minister 7 November 2010'.
- We have been engaged in various competition law matters, including the application of the definition of a cartel provision to vertical arrangements between competitors, the application of TPA exceptions to what would otherwise be prohibited cartel conduct, and anti-competitive conduct in the credit card industry.
- Brent Fisse is running two post-grad intensive courses in 2011: Cartels and Competition Law, at Melbourne Law School in February-March - see http://www.masters.law.unimelb.edu.au/index.cfm?objectid=3A45C705-1422-207C-BA6886C167CEB45F&view=overview&sid=4797, Competition and Consumer Law: Exceptions and Defences, at the University of Sydney in August - see http://sydney.edu.au/law/subjects/PG/2011/LAWS6978.shtml
- The NZ government announced on 27 October 2010 that it will publish draft legislation on cartel criminalisation for discussion early in 2011. This draft legislation is unlikely to resemble the 2009 Australian crazy quilt.
- The Australian Treasury (sleepy + hollow = "sleepy hollow") has yet to respond to submissions on the concept of an understanding under the TPA; submissions were made by 31 March 2009 as requested by Treasury in January 2009. Meanwhile, having advanced a dud proposal in December 2007, the ACCC continues to comment in the media about price signalling and other facilitating practices. Unless and until there is a sensible white paper from the government setting out detailed options and proposals, little progress is likely to be made. However, Treasury has never advanced any detailed discussion of the definition of cartel conduct or facilitating practices so expectations are low. The recent commentary by Commissioner Jill Walker highlights the lack of any adequate discussion paper by Treasury or the ACCC. For background, see Beaton-Wells and Fisse, 'Broadening the Definition of Collusion: A Call for Caution' (2010) 38 Federal Law Review 72 (that paper is based on the first part of a paper at the LCA/FCA workshop on cartels in April 2009 - available in Publications); Fisse, "Avoidance and Denial of Liability for Cartel Conduct: Proactive Lawful Escape Routes Left Open by the Cartel Leislation" 2009 Competition Law Conference, Sydney, 23 May 2009
- The NZ Commerce Commission has published guidelines on the prevention and detection of bid-rigging: http://www.comcom.govt.nz/media-releases/detail/2010/guidelines-on-recognising-and-deterring-bid-rigging-released-by-commerce-commission. These guidelines heed the criticisms of the ACCC guide Cartels: Detection and Deterrence: A Guide
for Government Procurement Officers (2009) made in Fisse, "Avoidance and Denial of Liability for Cartel Conduct: Proactive Lawful Escape Routes Left Open by the Cartel Legislation" 2009 Competition Law Conference, Sydney, 23 May 2009 at pp 17-18.
- We have finished writing a book with Caron Beaton-Wells on Australia's anti-cartel regime (Australian Cartel Regulation: Law, Policy and Practice in an International Context, Cambridge University Press, 2 Feb 2011, pp i-xxxii, 1-616). This covers a wide range of issues in detail. The cartel legislation continues to generate difficult issues that stem from poor legislative design. The Rudd Government was responsible for this effort which is likely to backfire when litigation ensues and the courts have to come to grips with its failings. Corporations and their advisers are forced to deal with provisions that are overbroad and ill-defined and defy rescue by judicial Samaritans.
- The NZ Ministry of Commerce published a detailed discussion paper on cartel criminalisation (http://www.med.govt.nz/upload/70683/Cartel-Criminalisation.pdf). The NZ discussion paper focusses on many relevant issues and puts to shame the feeble discussion papers on this topic by the Australian Treasury. This is one of many reasons why it would be misguided to assume that the Kiwis should or will follow the TPA cartel provisions. Another is that the TPA is regarded with considerable scepticism in NZ. Compared with the Commerce Act, the TPA is overblown with detail, erratic in its adherence to economic principle, prone to irrational political extemporising (eg the Birdsville amendments, the proposed Richmond and Blacktown amendments, and the Competition and Consumer Amendment Bill (No. 1) 2011) and generally in need of serious overhaul. Changing the name to the Competition and Consumer Act is more political window-dressing.
- The Chairman of the ACCC shared his insight that those who breach the TPA by acting anti-competitively are crooks who wear "flash suits and shiny shoes" (Media Release, 25 February 2010). Trade practices compliance programs may need to be revised and expanded accordingly; see 'Cartellists beware - do not wear flash suits or shiny shoes' (March 2010).
- We are acting for several new clients including a pre-paid card entrant and a major online retailer.
- The Commerce Commission of NZ settled litigation against credit card isssuers and banks, saying that the settlements have achieved 'a new competitive landscape for the credit card industry in NZ' (see http://www.comcom.govt.nz//MediaCentre/MediaReleases/200910/creditcardsettlementslowernewzeala.aspx). We advised on the theory of the case under ss 27 and 30 of the Commerce Act.
- The Canadian Bureau of Competition introduced a process for providing written binding opinions on the application of the new amendments to s 45 of the Competition Act (Can) to existing agreements - this process applied until the new provisions commenced on 10 March 2010: http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/03095.html Last May, the Bureau published detailed draft guidelines on collaborations between competitors under the amendments to s 45: http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/02987.html Compare the very limited guidance provided by Treasury and the ACCC about the application of the cartel amendments to Part IV Div 1 of the TPA.
- We have advised several major corporations on the application of the cartel legislation to proposed commercial alliances and joint activity.
- We continue to advise clients on changes to compliance and liability control precautions for managing the anti-cartel legislation. This work includes reviews of possible cartel provisions in pre-existing contracts - the cartel legislation makes it an offence to give effect to pre-existing cartel provisions.
- We have advised and continue to advise a foreign government on issues of cartel criminalisation.
- "The Contract Requirement for the Joint Venture Exceptions under ss 44ZZRO and 44ZZRP of the Trade Practices Act" was published in (2009) 17 Competition & Consumer LJ 43. The paper discusses the silly but dangerous traps for the unwary that have been set by ss 44ZZRO and 44ZZRP.
- Brent Fisse conducted an intensive post graduate subject “Cartels and Competition Law” at Melbourne Law School, 5-11 August 2009. See Cartels and Competition Law 2009. This subject offered a comprehensive and constructive critique of the new cartel legislation plus extensive materials, including various unpublished commentaries. The subject was also offered in 2008.
- We are preparing a parody on jury directions on cartel offences. Template jury directions are offered, with appeal-resistance ratings ranging from low fire danger to spontaneously combustible. This exercise is faute de mieux: no template jury directions have been published by our law-makers for comment or as proof (or disproof) of concept (contrast eg ABA, Model Jury Instructions in Criminal Antitrust Cases (2009)). Examples of jury directions with a spontaneously combustible rating are set out in Bench Test - Cartel Offences - Charge 5 and Bench Test - Cartel Offences - Charge 6. Later Bench Tests will assess various possible directions on the vortex of a 'cartel provision' under s 44ZZRD, the element of 'belief', the relevance or otherwise of the concept of 'wilful blindness' and other key issues. The 'Treasury direction' is a very taxing resource - it is laden with explanations exhumed from the Henry report on future taxation policy. The 'Abbott direction' (v 1) on the purpose condition under s 44ZZRD is derived from the doctrine of double effect and results in an abortion. The 'Gillard direction' (v 1) can be read forwards or backwards, a palindromic feature enabled by endless repetition of primitive 'pop' messages. The 'Rudd direction' starts out as high principle but is shortened brutally after feedback from a mindless focus group. The 'Bryce direction' exploits and evokes the designs of Carla Zampatti. The 'Costello direction' vacillates and ultimately cancels itself out. The 'Katter direction' puts s 44ZZRD under a Nth Queensland microscope and projects Mt Isascopes. The 'Ratzinger direction' is an apology to jurors in terms dripping with rectitude, sanctimony and other excrescences. The 'Pell direction' denounces cartel conduct as a form of gay marriage, with profound insights into the age-old religious art of facilitating practices. The 'Gillard direction' (v 2) purports to direct a jury on the 'real' law but is riddled with internal inconsistencies. The 'Shorten direction' parrots the Gillard direction (v1 or v2, in oscillation). The 'Abbott direction' (v 2) is littered with single, double and treble negatives. The 'Pyne direction' makes full use of freedom of screech. The 'Bernardi direction' describes cartel conduct as a bestial union but not one attributable to coalition.
- We have prepared a working paper for clients on withdrawal as an avenue for denying liability for the cartel prohibitions as a principal party and for all forms of ancillary liability. The disparities under the TPA are arbitrary and stem from careless accidents of legislative history.
- We have prepared an internal working paper on the use of unilateral facilitating practices as a means of side-stepping liability for cartel offences and cartel civil prohibitions. Used with care, unilateral facilitating practices can side-step the per se criminal and civil prohibitions against cartel conduct. This is helpful given that the cartel prohibitions are ill-defined and too far-reaching. Faciltating practices are a very important part of any serious discussion about cartel regulation but have been much neglected in Australia to date. For example, the 2009 cartel amendments and discussions by the government and enforcement agencies lack any Rudder of 'detailed programmatic specificity' on unilateral facilitating practices - there is no apparent program, detail or specificity.
- Brent Fisse gave a paper on exceptions to the TPA cartel prohibitions at the LexisNexis conference on cartel conduct in Sydney on 16 July 2009. The exceptions create many nasty surprises for the unwary. They also reflect a failure by lawmakers to see the wood for the trees and are in a state of disarray. A forthcoming book with Caron Beaton-Wells on Australia's anti-cartel regime (Australian Cartel Regulation: Law, Policy and Practice in an International Context, Cambridge University Press, 2 Feb 2011) includes a substantial chapter on this subject.
- Brent Fisse has prepared a comprehensive analysis of individual liability, as a principal party and for complicity, for the cartel offences and for breaches of the civil cartel prohibitions (incorporated in C Beaton-Wells and B Fisse, Australian Cartel Regulation: Law, Policy and Practice in an International Context, Cambridge University Press, 2 Feb 2011). For all the fanfare and hot gospel about how cartellists will go to jail, no adequate attempt has been made by the lawmakers to work out how best to achieve individual accountability for cartel conduct. For example: (a) the explanation given in the Explanatory Memorandum (at pp 29-30) is confused and misleading - it misstates the operation of the extended liability provisions in s 6; and (b) no attempt has been made to address the inevitability of 'shut-eyed sentries' and the use of the 'insulated conductor' stratagem that have been known problems at least since the heavy electrical equipment conspiracies in the US in the late 1950s. On shut-eyed sentries and the insulated conductor stratagem, see Fisse, "Avoidance and Denial of Liability for the Cartel Offences: Proactive Lawful Escape Routes Left Open by the Cartel Legislation" (2009 Competition Law Conference, Sydney, 23 May 2009), in Publications.
- Brent Fisse is exploring the scapegoating that occurred in relation to the participation by Qantas in the air cargo price fixing. The senior managers at Qantas who led that participation were never the subject of enforcement action in Australia, for reasons not given in the joint submission of Qantas and the ACCC on penalty nor in Lindgren J's judgment. They were not subject to extradition to the US because at that time cartel conduct was not an offence in Australia. By contrast, the US manager (Mr Bruce McCaffery) who followed the instructions of Qantas senior management was jailed for 6 months. The transcript of the US sentencing proceedings highlights the scapegoating that occurred.
- Have you grappled with the myriad bases of liability for complicity in cartel conduct under the cartel legislation? There are now 4 differing sets of provisions dealing with ancillary liability in Australian competition and consumer law. Under the CCA, there are two main sets of provisions (s 76 and s 79; see also s 75B). Under the ACL there is: (a) s 224, the ancillary liability provisions of which parallel those in CCA s 76; and (b) the Criminal Code (Cth) extensions of liability which apply (CCA s 6AA) without the modifications made by CCA s 79. (Contrast the transmogrification in M Legg, Regulation, Litigation and Enforcement (2011) 245). This proliferation of divergent heads of criminal and civil ancillary liability is unnecessary and increases the cost of compliance and litigation. An opportunity for rationalisation and consolidation arose at the time of the cartel amendments in 2009 and the ACL amendments in 2010 but was missed. The "guano" technique of developing the law by the random scattering of various deposits seems to be genetically imprinted on those who frequent Canberra's legislative breeding grounds.
- TPA s 84(4A) purports to exclude the possibility of jail where an individual employer is liable for a cartel offence on the basis of the conduct or mental state of an employee under s 84(3)(4). Look closely at how s 84(4A) will operate in the context of a jury trial. As an individual employer, would you want to run the gauntlet of relying on s 84(4A)?
- We have prepared a detailed working paper for clients on corporate criminal liability for cartel conduct. This includes an analysis of the case law where knowledge or belief has been attributed to a corporation by adding up bits of information held by various employees or agents without focussing on any cogent principle of corporate responsibility or the wording of s 84 of the TPA.
- Brent Fisse gave a presentation on "The TPA cartel amendments - What are the main changes? What do they mean for business?" at the Commercial Law Association trade practices seminar in Sydney on 19 June 2009. The presentation included an outline of the practical implications of the TPA amendments for compliance and liability control systems.
- A paper is available on the requirement of a contract, or a proxy for a contract, for the proposed jv exceptions under ss 44ZZRO and 44ZZRP - see Publications. This requirement has adverse and oppressive implications for many Australian joint venture arrangements and other collaborations between competitors. The Explanatory Memororandum tries to paper over the cracks but the gap is wide and the explanation given is suspect as a matter of law, incomplete and highly misleading as a guide to compliance. Along with such other aberrations as the Birdsville amendment to s 46, the prohibition against third line forcing, the proposed amendments on creeping acquisitions, and the Competition and Consumer Amendment Bill (No. 1) 2011, the contract requirement for the joint venture exceptions is on the lunatic fringe of world competition laws and policies. Contrast the bizarre pretence of Ken Henry that Treasury is concerned to avoid complexity and undue imposition of risk in order to promote a Amartya Sen state of wellbeing: "Treasury glad to see back of Costello", The Australian, 17 Dec 2007.
- Brent Fisse gave a paper, "Avoidance and Denial of Liability for the Cartel Offences: Proactive Lawful Escape Routes Left Open by the Cartel Legislation" at the 2009 Competition Law Conference, Sydney, 23 May 2009. See Publications.
- New partners Oscar and Bertie Fisse at work on the cartel legislation: "Part IV Div 1 is a real dog's breakfast" (January 2009)
- Bertie Fisse, "This Horizontal Arrangement has a Positive Welfare Effect but is not Covered by any Anti-Overlap Exception" (8 September 2009)
- We have drawn to the attention of the Auditor-General the inadequacy of the treatment of joint ventures in the ACCC guide, Cartels: Detection and Deterrence: A Guide for Government Procurement Officers (2009). The Guide refers briefly to 'certain joint ventures' and 'certain joint venture arrangements' without explaining exactly what kinds of joint bidding or other collaborative arrangements should or should not pass scrutiny. Joint bidding and similar arrangements can easily be used to avoid the cartel prohibitions, with or without justification.
- Caron Beaton-Wells and Brent Fisse presented a detailed paper, "The Cartel Offences: An Elemental Pathology" at a joint Law Council of Australia and Federal Court of Australia workshop on cartel criminalisation in Adelaide, 3-4 April 2009. This paper includes extensive new material on the concept of an 'understanding' and the fault elements of the cartel offences. The part dealing with the concept of 'understanding' and the ACCC's unsatisfactory proposal for amending the TPA has been included in a submission to Treasury - see Publications.
- Brent Fisse made a submission to the Senate Economics Committee on the Trade Practices Amendment (Cartel Conduct and Other Conduct) Bill 2008; see Publications. This ill-conceived Bill (enacted in June 2009 and which commenced on 24 July 2009) contains many unsatisfactory provisions, some of which impose per se criminal and civil liability for pro-competitive or harmless conduct.
- For a culinary review of the new cartel legislation, see Fisse, "Kartelpuffer: A Very Flat and Indigestible Australian Pancake" (24 August 2009) and hear the radio interview
- A detailed analysis of the cartel criminalisation exposure draft material released by the Government for public consultation on 11 January 2008 was set out in an Issues Paper in a submission to Treasury prepared by Caron Beaton-Wells of the University of Melbourne and Brent Fisse - the submission is available at: http://www.treasury.gov.au/documents/1350/PDF/Dr_Caron_Beaton-Wells_and_Mr_Brent_Fisse.pdf
- The Issues Paper referred to above was based on a paper presented at the University of Sydney on 21 February 2008 and the University of Melbourne on 25 February 2008. It was published in revised form in (2008) 36 Australian Business Law Review 166 together with commentaries by Justices Peter Heerey and Roger Gyles, Luke Woodward and Bob Baxt.
- A paper by Beaton-Wells & Fisse, "Criminal Cartels: Individual Liability and Sentencing", was presented at the 6th Annual University of South Australia Trade Practices Workshop on 18 October 2008. This paper provides a constructive critique of numerous further flaws in and questions raised by the Australian proposals for cartel criminalisation. The cartel amendments to the TPA passed in June 2009 do not resolve those flaws or questions.
- Brent Fisse presented a paper "Cartel Offences" at the Federal Criminal Law Conference in Sydney on 5 September 2008. He presented another paper with Caron Beaton-Wells at the NZ Competition Law and Policy Institute workshop on 2 August 2008 - "The Australian Criminal Cartel Regime: A Model for New Zealand?" - the main argument of this paper is that the Australian model is pervasively flawed and unsuitable for adoption in NZ, or anywhere.
- We have acted in a matter of alleged breach of the principle of competitive neutrality.
- Brent Fisse has advised on price fixing issues in several recent cases.
- We have conducted independent audits of trade practices compliance programs for a wide range of companies.
- We prepared a collective bargaining notification for the members of an industry association (AIR). The notification has been accepted by the ACCC - see ACCC Assessment of 8 January 2009.
- We acted for the Universal Music Group in obtaining clearance in Australia from the ACCC for the Australian component of the global acquisition of BMG Music Publishing for $2 billion (October-December 2006).
- We acted for PPCA in its application for re-authorisation of its collective licensing arrangements.
- We acted for the Universal Music Group in obtaining clearance in Australia from the ACCC for the acquisition of the Sanctuary Group.
- Brent Fisse advised a syndicate of US plaintiff attorneys on Australian price fixing cases and their implications for US-based class actions.
- Brent Fisse advised a major company on MFN clauses under the TPA.
- We advised on mitigation of penalties under the TPA.
- We prepared drafting instructions for electronic transactions legislation in Fiji under an ADB-funded project. The Electronic Transactions Promulgation was gazetted on 14 November 2008.
- Brent Fisse’s paper “The Cartel Offence: Dishonesty?” was published in (2007) 35 ABLR 235.
- "The Australian Cartel Criminalisation Proposals: An Overview and Critique" was published in (2007) 4(1) Competition Law Review 51 (see Publications for a copy of this paper).
- Brain-teaser: reconsider ACCC v Pauls Limited  FCA 1586 at - - is the counterfactual reasoning valid or fundamentally inconsistent with the wording and purpose of the statutory provisions on price fixing? See Fisse, "Controlling a Price and the Legal Irrelevance of Counterfactual Analysis" (2009).
- FOI applications against Treasury and ACCC:
- Lexpert Publications and Brent Fisse applied for AAT review of Treasury and ACCC decisions about FOI requests made in March 2007.
- The Treasury material sought is the report of the Working Party on criminalisation of cartel conduct in April 2004. The ACCC material sought was a copy of a supplementary submission made by the ACCC to the Dawson Committee in 2002 and referred to in the Dawson Committee's Report. See Application for AAT Review of FOI Decisions by Treasury and the ACCC June 2007 (2 mb).
- On 24 August 2007 Gilbert + Tobin were advised by the AGS that the ACCC had decided to release the information sought from them. The documents were made available on 4 October 2007. They reveal some remarkable indadequacies. For the documents and introductory comments see ACCC Supplementary Submissions to Dawson Committee 2002 (1 mb).
- On 10 August 2007 the applicants were advised by Treasury that the Secretary of the Treasury was giving active consideration to issuing a certificate under section 36(3) of the FOI Act and asked for a submission on that question within 2 weeks. See Submission to Secretary of Treasury 24 August 2007 (564 kb). The expectation was that a decision on the section 36(3) certificate issue would be made within 2 weeks after receipt of our submission. Eventually, in a letter dated 5 November 2007, we were advised that a decision had been made: (a) not to issue a conclusive certificate; and (b) to release some additional pages from the Working Party Report.
- The AAT review (hearing on 19 February 2008) did not succeed. See AAT Decision 10 April 2008. An appeal against that decision to the Federal Court was heard by the Full Federal Court in September 2008 but failed - see Fisse v Secretary, Department of the Treasury  FCAFC 188 (11 December 2008) at http://www.austlii.edu.au/au/cases/cth/FCAFC/2008/188.html.
- The Working Party Report might have shed some light on the many issues about cartel criminalisation in Australia that have never been adequately discussed in any other public official document; for particulars of the many shortfalls in publicly available information about important issues, see Fisse Affidavit in AAT Proceedings. See also Fisse AFR op-ed 26 October 2007. For the heavily redacted Stasi-style version of the Report released by Treasury in response to the first FOI application, see Working Party Report on Criminal Penalties for Cartel Behaviour (2004) (3.2mb). A satirical version, 'The Working Party Report on Cartel Criminalisation: Transcription from Air Costello's Balloon Flight Recorder', is in preparation.
- An application for the Working Party Report was made to Treasury on 1 Nov 2010 under the amended FOI Act. Treasury thereupon released the document on 2 December 2010. The Report is remarkable in several respects. It includes a recommendation that notification of a contract, arrangement or understanding to the ACCC be a defence in criminal proceedings for cartel conduct and another that secrecy be an element of the cartel offence proposed. Those recommendations are highly problematic and were not accepted by the Government. Instead, the Government of the time switched to making dishonesty an element of the proposed offence. Treasurer Costello's Press Release of 2 February 2005 announcing that the Government would introduce criminal penalties for serious cartel behaviour with a dishonesty-based cartel offence seems calculated to conceal the fact that the Government departed significantly from the solutions proposed by the Working Party. Nor did Treasury subsequently reveal the true background in its discussion paper in January 2008 when an exposure draft bill was released by the Labor Government (see http://www.treasury.gov.au/contentitem.asp?ContentID=1330&NavID=). No phoenix could ever emerge from these ashes but forensic pathologists may find traces of DNA scattered throughout the Working Party Report, as reproduced here in full with the copyright permission of the Commonwealth. As at 21 March 2011 the Working Party Report had not been published by Treasury; for example, it is not included in the list of Working Papers published on the Treasury website.