ACCC v Prysmian Cavi E Sistemi S.R.L. (No 12) (FCA)

Federal Court of Australia
Justice Besanko

ACCC v Prysmian Cavi E Sistemi S.R.L. (No 12) [2016] FCA 822 (20 July 2016)

Note: An appeal by Prysmian failed in the Full Court and Special Leave to appeal to the High Court was refused

Catchwords

COMPETITION – alleged contravention of Trade Practices Act 1974 (Cth) and Competition Codes of the States – price fixing and market sharing – where relevant markets are for land cables and submarine cables in Australia – where alleged overarching international cartel arrangement or understanding – whether subsequent alleged arrangement or understanding relating to a tender on a specific project contravened Act – whether subsequent alleged arrangement or understanding gave effect to alleged overarching cartel arrangement or understanding – whether issuing a price guidance and submitting a tender gave effect to alleged arrangements or understandings – Trade Practices Act 1974 (Cth), ss 45(2)(a), 45(2)(b)

COMPETITION – price fixing and market sharing – consideration of elements of prohibited arrangement or understanding – whether parties undertook the level of commitment necessary for purposes of establishing an arrangement or understanding – whether there was competition in a market in Australia – whether the arrangement or understanding contained an exclusionary provision – whether there are “particular persons or classes of persons” for purposes of s 4D - whether arrangement or understanding had the purpose or was likely to have the effect of fixing or controlling prices – Trade Practices Act 1974 (Cth), ss 45, 45A, 4D

COMPETITION – price fixing and market sharing – attribution of conduct – whether natural persons alleged to be involved in conduct were representatives of company respondents – consideration of agency principles – consideration of principles in Meridian Global Funds Management Asia Ltd v Securities Commission [1995] UKPC 5; [1995] 2 AC 500 - where respondent companies part of large company groups – where alleged natural persons not employees of respondent company – where no delegation of authority or powers or functions to alleged natural persons – Trade Practices Act 1974 (Cth), s 84(2)

COMPETITION – extra-territorial application of Trade Practices Act 1974 (Cth) – where alleged conduct was engaged in outside of Australia – whether respondents were foreign corporations carrying on business within Australia – whether respondent carried on business within Australia indirectly through a subsidiary in Australia – whether respondent carried on business within Australia directly by providing services to a subsidiary in Australia - Trade Practices Act 1974 (Cth), s 5

EVIDENCE – objections to evidence – whether evidence should be excluded under the general discretion to exclude evidence – whether evidence was admissible as an opinion based on what a person saw, heard or otherwise perceived – Evidence Act 1995 (Cth) ss 135, 78.

Legislation

Competition Policy Reform (New South Wales) Act 1995 s 8

Evidence Act 1995 (Cth) ss 56, 76, 78, 135, 140

Federal Court of Australia Act 1976 (Cth) s 21

Interpretation Act 1987 (NSW)

Trade Marks Act 1995 (Cth) s 8

Trade Practices Act 1974 (Cth) ss 4, 4C, 4D, 4E, 5, 6A, 45, 45A, 76, 80, 84

This decision

Justice Besanco held that Prysmian had contravened the prohibition against price fixing (then contained in s 45 of the Act with the aid of a deeming provision in s 45A), but not the prohibition against exclusionary provisions (primary boycotts). Justice Besanco dismissed the claim against Nexans SA, holding that the ACCC had not established that Nexans SA was a party to a contravening agreement.

Background and broad findings

In 2009 the ACCC brought action against three parties; Prysmian Cavi E Sistemi SRL (Prysmian), Nexans SA and Viscas Corporation. It alleged market sharing and price fixing (effectively in the form of bid rigging) between September and October 2003 in contravention of s 45(2) of the TPA (now the CCA; the relevant conduct occurred prior to introduction of the new cartel laws).

In particular, the ACCC alleged that four companies - Prysmian, Nexans SA, Viscas and J-Power Systems (JPS - whistleblower and received immunity from prosecution) - engaged in cartel conduct in the markets for land cables and submarine cables worldwide in the form of bid rigging and market allocation.

Prysmian appealed the decision in August 2017 and, on 13 March 2018, the Full Federal Court dismissed the appeal.

Prysmian (the Italian company)

In July 2016 Justice Besanco held that Prysmian had contravened the prohibition against price fixing (then contained in s 45 of the Act with the aid of a deeming provision in s 45A), but not the prohibition against exclusionary provisions (primary boycotts).

Nexans SA (the French company)

In July 2016 Justice Besanco dismissed the claim against Nexans SA, holding that the ACCC had not established that Nexans SA was a party to a contravening agreement.

Viscas Corporation (the Japanese company)

In 2013 Viscas, the third respondent, admitted it had engaged in the relevant conduct and received a penalty of $1.35million (ACCC v Prysmian Cavi E Sistemi Energia SRL (No 5) [2013] FCA 294 (5 April 2013)).

ACCC Media releases

ACCC, ‘High Court refuses leave for electrical cable cartel appeal’ (8 August 2018)

ACCC, 'Full Federal Court dismisses cartel appeal' (13 March 2018)

ACCC, 'Federal Court finds cable manufacturer engaged in cartel conduct' (21 July 2016)

ACCC, 'Japanese cable supplier to pay $1.35 million penalty for cartel conduct' (5 April 2013)

Other commentary

Charmaine Lam, 'You Win Some, You Lose Some' (In Competition, King&Wood Mallesons, 11 August 2016)

Related Judgments

Special leave

Appeal to Full Court

On the penalty (Prysmian)