A recap of the ACCC’s recent competition law enforcement actions

In the follow up to our earlier article on Consumer law, we now examine some key cases involving the ACCC in Competition law.

ACCC v Techtronic Industries Australia Pty Ltd (NSD1220/2021)

In November 2021, the ACCC commenced proceedings against Techtronic, a wholesaler of ‘Milwaukee’ power tools in Australia.

Between 2015 and 2021, Techtronic is alleged to have entered into 96 agreements with independent dealers and buying groups to restrict the sale of products below a specified minimum price. Practically, this meant that customers of Techtronic were precluded from setting their own prices for Milwaukee products.

It is alleged that Techtronic would issue reminders, warnings and breach notices to their wholesale customers for non-compliance if they sold below the minimum price. Additionally, on two occasions Techtronic is alleged to have actually withheld supply from its customers.

In these proceedings, the ACCC is seeking penalties, declarations, injunctions, a compliance program order, an order for corrective advertising and costs.

ACCC v B & K Holdings (QLD) Pty Ltd t/as FE Sports [2021] FCA 260

In March 2021, the Federal Court handed down its judgment in this case after B & K Holdings (QLD) Pty Ltd t/as FE Sports (FE Sports) admitted liability for engaging in retail price maintenance.

FE Sports is a wholesaler of cycling accessories and sporting products. Between 2017 and 2019, FE Sports on 328 occasions provided terms of trade to customers which stated it would not supply products unless the retail dealer agreed not to advertise below the RRP. Between 2017 and 2019, FE Sports made 242 written agreements with customers including a term that the dealer would not advertise the goods below the RRP.

FE Sports admitted the conduct constituted retail price maintenance and the penalties were made by the Court by consent. Those penalties consisted of pecuniary penalties of $350,000, a requirement to issue corrective letters to affected dealers and to implement a compliance program.

ACCC v First Class Slate Roofing Pty Ltd & RAD Roofing Specialists Pty Ltd t/as Mr Shingles (NSD1118/2021)

In October 2021, the ACCC commenced proceedings against First Class Slate Roofing Pty Ltd (First Class), RAD Roofing Specialists Pty Ltd t/as Mr Shingles (Mr Shingles) and each of their directors for alleged cartel conduct for activities known as bid rigging. First Class, Mr Shingles and their respective directors are alleged to have engaged in bid rigging for projects at Wesley College and a project in Bellevue Hill.

For this project, First Class allegedly entered into an agreement with Mr Shingles and a third party where First Class would provide each of them a list of prices to submit which were higher than the First Class tender price. First class is alleged to have paid $10,000 to the third tenderer and to Mr Shingles for using the provided list of prices in their tenders. The third party and Mr Shingles are alleged to have then issued an invoice to First class for “installing a new slate roof” and the “supply of slate”, which the ACCC says were in fact payments for participating in the bid rigging scheme. Subsequent to payment occurring and the submission of tenders, First Class was awarded the project.

For the Bellevue Hill project, Mr Shingles is alleged to have reached an agreement with First Class to provide it with a tender price to submit which was substantially higher than the price of the Mr Shingles tender. In return, First Class would purportedly receive $2,000. Subsequent to this alleged conduct, Mr Shingles quotation was accepted.

The ACCC is in this case seeking pecuniary penalties, declarations, injunctions and disqualification orders for the directors.

ACCC v Delta Building Automation Pty Ltd (ACD32/2021)

In May 2021, the ACCC commenced proceedings against Delta Building Automation Pty Ltd (Delta) and its director for alleged cartel conduct. Delta designs, installs and maintains building management systems.

At a café in Canberra, the director of Delta is alleged to have attempted to fix the price of bids to be submitted by Delta and its competitor for a tender for the National Gallery of Australia. Ultimately, the proposed arrangement was not made with the competitor rejecting the approach. The ACCC alleges that the director, on behalf of Delta, attempted to make, or attempted to induce the making of, an arrangement or understanding with a competitor to engage in bid rigging.

The ACCC is seeking disqualification orders against the director, in addition to pecuniary penalties and injunctions.

ACCC v Tasmanian Ports Corporation Pty Ltd [2021] FCA 482

In May 2021, the Federal Court declared by consent that Tasmanian Ports Corporation Pty Ltd (TasPorts) had misused its market power which had the likely effect of substantially lessening competition in the market.

TasPorts provides marine pilotage and towage services to all ports in northern Tasmania. Engage Marine Tasmania Pty Ltd (Engage) entered this market as a competitor to TasPorts. Grange Resources Ltd (Grange), a TasPorts customer, came to notify TasPorts that it would cease acquiring its services at Port Latta and instead was going to take up the services of the new competitor, Engage. In response, TasPorts levied a ‘Marine Precinct Tonnage Charge’ on Grange for vessels calling at Port Latta.

TasPorts did not have a legal right to impose the new charge and sought to do so without conducting a full assessment of the cost of providing access services to Grange. This would have the effect of raising Grange’s future costs of acquiring services from a competitor, as to do so would mean that although Grange was not acquiring the services of TasPorts at Port Latta, by engaging the services of a competitor it would also have to bear the newly minted Marine Precinct Tonnage Charge from TasPorts.

This was a particularly important win for the ACCC, not only because of the pivotal role TasPorts plays in the Tasmanian economy, but also because it was the first time a corporation was declared to have breached the revised misuse of market power law.

By consent, TasPorts paid costs of $200,000 to the ACCC and gave a s 87B undertaking.

Conclusion

The ACCC’s recent enforcement activity in the competition space has been diverse, looking at complex and impactful anti-competitive conduct (such as the TasPorts case), while also taking action against conduct on a smaller scale (as was the case with First Class Slate Roofing). Directors in particular need to carefully consider their conduct, as the case of Delta Building Automation provides a warning that a potentially anti-competitive scheme does not even have to come to fruition for the ACCC to take enforcement action.

Authors: Jennifer Shaw & Scott Homan

See also: A recap of the ACCC’s recent consumer law enforcement actions