Australia's competition law penalties "significantly lower" than OECD peers

Average penalties in Australia are 12.6 times lower, says report

Australia's competition law penalties "significantly lower" than OECD peers



The country’s competition regulator has said it will “re-think” its approach for violations of the competition law, after a recent report by the Organisation for Economic Co-operation and Development (OECD) found penalties in Australia to be “significantly lower” than its OECD peers.

The OECD report found that the average pecuniary penalty in Australia was $25.4m for cartel cases up to November 2017 (excluding more recent ones still under appeal). In other countries, the comparable figure would have been $320.4m – or 12.6 times higher than that of Australia.

“This is despite the fact that Australia’s legal regime seems to allow for the imposition of pecuniary penalties at the same level or even higher than in the comparator jurisdictions,” said the report. “This disparity in the amount of pecuniary penalties imposed in Australia and elsewhere has the potential to limit the effective deterrence of sanctions against competition law infringements in Australia.”

The report also said Australia a does not follow a structured methodology for the determination of pecuniary penalties. In Australia, penalties are determined by the Federal Court following an “instinctive synthesis” of various factors.

“This difference does not prevent Australia from imposing substantial and deterrent sanctions for competition law violations,” OECD Economist Sean Ennis said. “Clearer guidance on the size of penalties could be useful in Australia to ensure penalties deter and that companies are aware of the likely size of fines.”

For his part, ACCC Chairperson Rod Sims acknowledged the findings, and said they will be a vital point for discussion of future penalties. “As I have said before, we do not want breaches of our competition law to be seen as an acceptable cost of doing business. We need penalties that will be large enough to be noticed by senior management and company boards, and also shareholders,” he said.

“We will reflect carefully on the report, including the OECD’s suggestion to consider developing penalty guidelines, similar to the approach taken by the other OECD jurisdictions,” Sims added.


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