In order to obtain empirical evidence, the researchers have interviewed a broad range of people. Interviewees have come from three broad groups:
- people from businesses that have been subject to enforcement action by the ACCC for their involvement in cartel conduct (civil respondent interviewees),
- people involved in the regulatory authorities, prosecuting authorities, policy making bodies and academics and commentators development, including those from overseas bodies (stakeholder interviewees), and
- members of the Australian business community and members of the Australian general public (public opinion survey).
The data from these interviews will assist in assessing the likely impact of criminalisation on deterrence and compliance with the law, compare criminalisation policy and enforcement in Australia and overseas, and make recommendations about the practical implementation of the criminal regime.
The civil respondent interviews will provide direct evidence of the likely effect of criminalization on the behaviour of individual businesses and executives in Australia by collecting information about the circumstances and motivations behind cartel conduct, the influence of enforcement options other than criminalization had and what difference criminalization would have had on the behaviour.
The stakeholder interviews will provide insights into the impetus for and assist in maximising the effectiveness of serious cartel conduct criminalisation in Australia by examining and drawing comparisons in relation to the policy, design, administration and enforcement of serious cartel conduct regulation in the UK and US. These interviews will assist to identify the different options available and their different likely effects on compliance in terms of the scope and elements of the offence, investigatory powers, operation of immunity policy, relationship between regulatory and prosecutorial agencies, management of dual civil and criminal systems, mode of trial, presentation of evidence, and sentencing.
The public opinion survey will provide evidence of what the public know about serious cartel conduct, their views as to how it should be regulated and punished, particularly the appropriateness of criminal penalties. The business persons' survey will also test business peoples' perceptions of deterrence in relation to sanctions of imprisonment, the moral stigma associated with criminal investigation and prosecution, and the impact of the ACCC's immunity policy that encourages whistle-blowing by cartel participants, compared with motivations for compliance and non-compliance, and other factors that are likely to affect compliance.
Australian Stakeholder Interviews
The researchers have conducted interviews with the following 'stakeholders' to date regarding aspects of cartel criminalisation in Australia:
- Mr Allan Asher, Commonwealth Ombudsman, barrister of the High Court of Australia, former inaugural CEO of the Australian Communications Consumer Action Network, former CEO of EnergyWatch (UK) and former Deputy Chairperson and Consumer Protection Commissioner of the ACCC
- Professor Bob Baxt, Partner, Freehills, former Chairman of the Trade Practices Commission, former Chairman of the Trade Practices Committee of the Law Council of Australia
- Marcus Bezzi, current Executive General Manager of the ACCC's Enforcement and Compliance Division
- Minister Chris Bowen, former Assistant Treasurer and Minister for Competition Policy and Consumer Affairs, current Minister for Immigration and Citizenship
- Sarah Court, current Commissioner of the ACCC
- Matthew Drummond, journalist with the Australian Financial Review
- Professor Allan Fels, former Chairman of the ACCC, current Dean of the Australia and New Zealand School of Government
- Justice Finkelstein, Federal Court of Australia; Australian Competition Tribunal
- Matthew Lees, lawyer, Arnold Bloch Leibler
- Catriona Lowe, co-CEO, Consumer Law Action Centre
- Steven Münchenberg, former Deputy Chairman of the Business Council of Australia, current Chief Executive Officer of the Australian Bankers' Association
- Dr David Neal S.C., Victorian Bar, member of the Law Council of Australia committee on Criminal Law, former Commissioner, Victorian Law Reform Commission, former Head, Legislation Branch Victorian Justice Department, former Chair, Model Criminal Code Committee
- Professor Warren Pengilley, former Commissioner of the Trade Practices Commission, academic at the University of Newcastle
- Ross Ray QC, member, Bar Council, past Chair of the Victorian Bar, past President of the Law Council of Australia
- Curt Rendall, former member of the Dawson Committee, former Associate Commissioner of the Productivity Commission, former Chairman of the Federal Government's Small Business Consultative Committee, Deputy Chairman of the New Tax System Advisory Board and an Associate current member of The Board of Taxation
- Graeme Samuel, current Chairman of the ACCC
- Hank Spier, former Chief Executive Officer of the ACCC, current Chair of the Foundation for Effective Markets and Governance
- Leon Zwier, partner, Arnold Bloch Leibler
Additional interviews have been conducted on a confidential basis.
UK Stakeholder Interviews
During September-December 2009 Associate Professor Caron Beaton-Wells conducted a series of interviews with stakeholders in the United Kingdom for the purpose of the component of the Project concerned with comparative research into the experience with criminalisation in other jurisdictions.
The people with whom interviews or discussions were held regarding the research for the Cartel Project were as follows:
- Professor Margaret Bloom, Director of Enforcement, Office of Fair Trading, 1997-2003
- Philip Collins, Chairman, Office of Fair Trading
- Adrian Darbishire, barrister who has acted for the defendants in the two criminal cases to date
- Carolyn Galbreath, Director, Cartels Group, Competition Authority (Ireland)
- Christopher Harding, leading academic and author on cartel regulation in Europe (Regulating Cartel in Europe, OUP)
- John Holmes, Principal Economist, Which? (consumer group)
- Katherine Holmes, Reed Smith, Law Society / Bar Working Group Chair in 2001-2002
- Julian Joshua, Howrey LLL, co-author of Regulating Cartels in Europe
- Jitinder Kohli, CEO Better Regulation Executive (formerly of Treasury)
- Sir Jeremy Lever, Monckton Chambers, barrister and leading academic commentator on the cartel offence
- Professor Philip Marsden, Director of Competition Law Forum, British Institute of International and Comparative Law; OFT Board (non-executive member)
- David McFadden, Legal Advisor, Competition Authority Ireland
- Ali Nikpay, Office of Fair Trading Director, Cartels Group
- Michael O'Kane, Peters and Peters (Head of Fraud and Regulatory Group), solicitor who has acted for the defendants in the two criminal cases to date, author of The Law of Criminal Cartels: Practice and Procedure, OUP (2009)
- Michael Peel, Legal Correspondent, Financial Times
- John Penrose MP, Shadow Minister for Business, Conservative Party
- Bill Prasifka, Chairman, Competition Authority Ireland
- David Rawlings, Senior Lawyer, Office of Fair Trading Criminal Cartels Team
- Prof Alan Riley, leading academic, City University; Convenor of CLaSF
- Anne Riley, Associate General Counsel (Antitrust), Shell
- Louise Speke, Policy Adviser, Law Society
- Professor Colin Thain, University of Ulster, conducting major research into the role of Treasury under New Labour in the UK
- Jon Turner, Monckton Chambers, competition law barrister who has acted for the OFT in the two criminal cases to date
- Cento Veljanovski, Case Associates (economics consultancy)
- Professor John Vickers, Chair of the Office of Fair Trading, 2000-2005
- Professor Richard Whish, leading academic, King's College; member of OFT Board, 2003-2009
The topics covered in the interviews were as follows:
- the impetuses for introduction of the cartel offence in the UK in 2002, including economic, political and social factors, as well as the influence of international approaches and developments in cartel regulation (particularly in the US)
- the roles played by various actors in the decision to criminalise, including the newly elected Labor government, the Treasury and Department of Trade and Industry, and the Office of Fair Trading
- the responses by various stakeholders in the UK, including the opposition, business sector, consumer groups, legal profession, and academia, as well as by competition authorities in the EU (particularly ECDG)
- the issues that proved most difficult in the design of the cartel offence and plans for its enforcement (eg differentiation from the EC rules and assignment of investigatorial and prosecutorial rules as between the OFT and the Serious Fraud Office)
- implications of criminalisation for the competition authority, including in relation to resources, skilling, enforcement policy and leniency policy
- the experience with enforcement to date, including the lessons from Norris, Marine Hose and the BA 4 cases.
We are grateful to all the interviewees who gave so generously of their time and insights for this purpose.
Civil Respondent Interviews
The researchers have conducted in-depth interviews with 19 Australian business people who have experienced enforcement proceedings under the previous civil regime in which they were found to have engaged in cartel conduct in breach of the Trade Practices Act 1974 (Cth) (TPA) after 2004 and before 2010, and 6 in-house lawyers who had been the main people responsible for dealing with cartel enforcement proceedings on behalf of corporate respondents in the same time period.
These interviews were designed primarily to assist in evaluating the policy assumption that cartel criminalisation would induce greater compliance through the mechanism of deterrence. The interviews help to understand business people's perceptions of their own behaviour, of the law and enforcement process and therefore of the likely impact of the law on their behaviour. Since we only interviewed business people, this is a partial perspective. Here we report only on business people's perceptions of their own behaviour. We do not examine and test their behaviour and the reasons for it from the point of view of those who are the "victims" of cartels, of the regulator or the general public. (Other parts of the University of Melbourne Cartel Project research these other points of view.)
Nor do we assume that business people's reports of their own behaviour are necessarily accurate or represent the whole truth. We do however argue that understanding business people's perceptions of their own behaviour and the reasons for it is crucial to understanding how deterrence will work in practice. By understanding how business people perceived the circumstances in which they have engaged in cartel conduct in the past, what they knew about the law and why they believe they did what they did, we can begin to understand whether they are likely to be influenced by greater deterrence through criminal sanctions.
Report on Interviews with Civil Respondents in Cartel Cases. This report provides a summary and analysis of the civil respondent interviews. You can link to the Report here.
How we identified potential civil respondent interviewees
Civil respondent interviewees were identified from public records, principally judgments of the Federal Court of Australia. The researchers reviewed judgments of the Federal Court of Australia handed down since 2004 for cases where the ACCC brought proceedings for breaches of the pre-existing civil prohibitions of cartel conduct under the Trade Practices Act. These cases include those brought by the ACCC against companies and individuals. The Annual Reports of the ACCC, which are publicly available, were also reviewed.
Individuals who were involved in conduct by a company were identified from the Federal Court judgments and ACCC Annual Reports, and in some instances, from news media reports of the case. In some instances, individuals who were officers or directors of a company against whom the ACCC brought an action were identified from the publicly available records of ASIC.