Allegations

The Australian Competition and Consumer Commission (ACCC) alleged that the first respondent, BlueScope Steel Limited and the second respondent, Jason Thomas Ellis the former general manager of sales and marketing, attempted to induce certain suppliers of flat steel products in Australia to contravene s 44ZZRJ of the Competition and Consumer Act 2010 (Cth) (Act) by making arrangements or arriving at understandings with BlueScope that contained cartel provisions (colloquially referred to as a “price fixing”) within the meaning of s 44ZZRD of the Act. The ACCC alleged that this conduct occurred during a 10 month period from approximately September 2013 to approximately June 2014 (the “relevant period”).

The ACCC alleged Mr Ellis devised a strategy to increase the value to BlueScope and its distributors of sales of flat steel products. The strategy was for BlueScope to publish a recommended resale price which was to be used by BlueScope, its distributors and import traders as a benchmark for raising their prices for the supply of flat steel products in Australia.

The ACCC further alleged Mr Ellis devised a strategy for addressing competition from overseas steel manufacturers to restrict the volume of imported steel entering Australia and to persuade overseas steel manufacturers to increase the price at which they sold flat steel products to Australian importer. The ACCC said the strategy also involved threatening to make anti-dumping applications against overseas steel manufacturers unless the price at which they sold flat steel products in Australia increased.

The ACCC contends that by these strategies BlueScope and Mr Ellis sought to control or maintain the price of flat steel products supplied or likely to be supplied by BlueScope and distributors in the Australian market. It alleged that, in carrying out these strategies, BlueScope and Mr Ellis attempted to induce arrangements or understandings containing a cartel provision with certain steel suppliers (seven Australian distributors, one import trader and one overseas steel manufacturer) within the meaning of s 76(1)(d) of the Act. 

BlueSteel and Mr Ellis denied all the ACCC’s allegations.

Applicable Legal Principles

The ACCC sought pecuniary penalties under s 76(1)(d) of the Act against BlueScope and Mr Ellis for attempting to induce certain suppliers of flat steel products in Australia to contravene s 44ZZRJ of the Act by arriving at understandings that contained a cartel provision within the meaning of s 44ZZRD of the Act. The type of cartel provision alleged by the ACCC is a “price fixing” provision as defined by s 44ZZRD(2).

The court considered the meaning of the words “attempt” and “induce” in the context of s 76 of the Act and determined, within the four categories of conduct a court is empowered to impose pecuniary penalties, this case concerned where a person attempted to induce a person to contravene such a provision (s 76(1)(d)).

Federal Court Decision

The Court ruled against BlueScope and Mr Ellis and found that the ACCC’s allegations of price fixing were established.

Going forward, the ACCC seeks penalties against BlueScope and the disqualification of Mr Ellis from managing corporations. A hearing to determine penalties and orders is set for April 2023.

Implications

As concerns the ACCC, it is hoped this judgment will “serve as a strong warning to all businesses and individuals that even attempting to reach a price-fixing arrangement with one or more competitors may have very serious consequences".

Michael Hodge KC (leading J Clark, S Chordia and R Pietriche) appeared for the first respondent, instructed by Gilbert + Tobin.