Prysmian Cavi E Sistemi S.R.L. v ACCC (FCAFC)

Federal Court of Australia (Full Court)
Justices Middleton, Perram and Griffiths

Prysmian Cavi E Sistemi S.R.L. v ACCC [2018] FCAFC 30 (13 March 2018)

This is an appeal from Australian Competition and Consumer Commission v Prysmian Cavi E Sistemi S.R.L. (No 12) [2016] FCA 822 (20 July 2016)

Note: Special Leave to appeal was sought but denied: “This application for special leave to appeal from the decision of the Full Court of the Federal Court of Australia (Middleton, Perram and Griffiths JJ) would not enjoy sufficient prospects of success to warrant a grant of special leave to appeal. The application should be dismissed.” (Justices Gordon and Edelman, Prysmian Cavi E Sistemi S.R.L. v Australian Competition and Consumer Commission [2018] HCASL 201 (8 August 2018) (Jade) (AustLII)

Catchwords

COMPETITION – alleged contravention of Trade Practices Act 1974 (Cth) – 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 participation of one cartel member in a specific project was necessary for contraventions by other members – whether issuing a price guidance and submitting a tender gave effect to alleged arrangements or understandings

PRACTICE AND PROCEDURE – natural justice – whether findings of trial judge went beyond the case pleaded at trial

In brief

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)). Briefly, Viscas admitted that:

'... in September 2003, it reached an anti-competitive arrangement with other Japanese and European suppliers of land cables in relation to an invitation to tender issued by Snowy Hydro Limited. The terms of the arrangement were that:
Of the parties to the arrangement who submitted a tender, the tenderer with the lowest price would be one of the European suppliers; and
The European suppliers would decide between themselves who would submit the lowest price.
Viscas acknowledged to the Court that this arrangement arose out of an overarching arrangement in relation to the allocation of projects involving those Japanese and European suppliers of land cables.' (ACCC Press release)

Justice Lander noted that the conduct was 'very serious' involving 'a deliberate course of conduct by engaging in anti-competitive behaviour at the expense of customers in that market' (para 34). He also noted that since the proceedings were instituted Viscus 'has endeavoured to introduce a culture of compliance' including introducing 'the Viscas Anti-Trust Compliance Manual' (para 38) and 'has cooperated with ACCC to the extent that it has admitted its contravention and reached the agreement' (para 39), meaning prosecution against them is no longer required 'which is to the advantage of the public generally and to ACCC, and to the Court' (para 40). Taking that into consideration his Honour concluded that the agreed penalty was 'within the appropriate range'. His Honour then ordered (para 45):

1. Viscas be restrained, for a period of 3 years form the date of these orders, from:
1.1 making any contract or arrangement or arriving at any understanding with one or more competitors for the supply of land cables to customers in Australia, which contains a provision:
1.1.1 which has the purpose, effect or likely effect of fixing, controlling or maintaining (or providing for the fixing, controlling or maintaining of) the price at which any party to the contract, arrangement or understanding, or any related body corporate or agent, will supply land cables to customers in Australia (other than a contract directly with a competitor who is a customer or agent, for supply to that customer or by that agent); or
1.1.2 which has the purpose of preventing, restricting or limiting the supply of land cables in Australia to particular persons or classes of persons, or to particular persons or classes of persons in particular circumstances or on particular conditions, by any party to the contract, arrangement or understanding, or any related body corporate or agent; and
1.2 giving effect to such a provision; unless
1.3 the conduct referred to in 1.1 and 1.2 is authorised under section 88 ... or any other Australian statute in accordance with section 51 of the Act; or
1.4 the contract, arrangement or understanding referred to in 1.1 is for the purpose of a joint venture for the supply of land cables, which joint venture is carried on jointly by all parties to the contract, arrangement or understanding, within the meaning of s 44ZZRP of the Act.
2. Viscas pay to the Commonwealth of Australia, in respect of its conduct of entering into an arrangement with one or more of its competitors containing provisions:
2.1 which had the purpose, effect or likely effect of fixing, controlling or maintaining (or providing for the fixing, controlling or maintaining of), the prices for land cables to be supplied to Snowy Hydro Limited; and
2.2 which had the purpose of preventing, restricting or limiting the supply of land cables on particular conditions by those competitors to Snowy Hydro Limited,
in contravention of the Act, a pecuniary penalty in the amount of $1,350,000, such penalty to be paid within 28 days of the date of these orders.
3. Viscas pay a contribution to the Applicant’s costs of and incidental to these proceedings, in the agreed amount of $50,000, within 28 days of the date of these orders.
4. The proceedings against Viscas otherwise be dismissed.