The reasons for Justice Heerey’s decision to accept the settlement between ACCC and Visy and impose record penalties ($36 million fine imposed on Visy for 37 contraventions under section 76(3) Trade Practices Act) are set out in his 333 paragraph judgment in Australian
Competition and Consumer Commission v Visy Industries Holdings Pty Limited (No
3) [2007] FCA 1617
Between January 2000 and October 2004 companies in the Visy Group and certain
officers of those companies engaged in price fixing and market sharing with
companies in the Amcor Group, contrary to s 45 of the Trade Practices
Act 1974 (Cth). Visy admitted liability. The parties entered an agreed statement of facts.
The maximum penalties applicable at the time of the contraventions in this
case were, in respect of each contravention, $10 million for a corporation and
$500,000 for an individual. Paragraphs 298-300 set out the ACCC’s method of calculating the proposed penalty.
In making his own assessment Justice Heerey made the following comments:
(The ACCC) did not set out to prove that any particular customer of
Visy suffered any particular loss. However, that is not to say that the conduct
in which Visy engaged was victimless. The whole point of price fixing and
market sharing is to obtain the benefit of prices greater than those which would
be obtained in a competitive market. It must follow that customers pay more
than they would in a competitive market, and so suffer loss. The conduct
involved here was inherently likely to cause loss. The fact that no particular
loss has been alleged in respect of any particular customer cannot alter that.
315 The cartel here went on for almost five years. Had it not been
accidentally exposed, it would probably still be flourishing. It was run from
the highest level in Visy, a very substantial company. It was carefully and
deliberately concealed. It was operated by men who were fully aware of its
seriously unlawful nature.
316 It is appropriate to make some allowance for the fact that the respondents
have admitted liability and thus saved a great deal of public expense for a
trial which could well have lasted six months or more…
319 The corporate culture of Visy in relation to its obligations under the
Trade Practices Act was non-existent. None of the most senior people hesitated
for a moment before embarking on obviously unlawful conduct. There was in
evidence a Visy document entitled "Trade Practices Compliance Manual" dated
February 1998. It was signed by Mr Pratt. It bears a distribution list, signed
by Mr Debney, with the names of 50 or so personnel covering every State and Head
Office. On the front cover it is said:
This is an important document. It is essential that it be read and understood by
you. Visy Industries requires strict compliance with its policy on the Trade Practices Act.
The document includes the stern warning that price fixing and market sharing are
"strictly prohibited" and that readers of the document "must never make (such)
arrangements with a competitor". Further, it is said Visy personnel
should avoid all contact with competitors or their employees other than contact
approved by senior management or Visy Industries’ Legal Counsel. All
necessary contact with competitors should be conducted in formal settings.
I doubt that Westerfolds Park and the Cherry Hill Tavern could be regarded as
formal settings. The Visy Trade Practices Compliance Manual might have been
written in Sanskrit for all the notice anybody took of it.
320 Parity with penalties imposed in other cases is a relevant consideration.
Counsel referred to a number of other cases. I do not think it necessary to
analyse these in detail. Ultimately each case turns on its own facts. Suffice
it to say that the penalty proposed is more than twice the highest previous
penalty imposed by this Court. That is reflective of the fact that this must
be, by far, the most serious cartel case to come before the Court in the 30 plus
years in which price fixing has been prohibited by statute.
