Australian Competition & Consumer Commission v ABB Power Transmission Pty Ltd [2004] FCA 819

FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v ABB Power Transmission Pty Ltd [2004] FCA 819

TRADE PRACTICES – contraventions of Pt IV of the Trade Practices Act 1974 (Cth) – pecuniary penalty – joint submissions and jointly proposed penalty– factors relevant in assessing appropriate penalty

Trade Practices Act 1974 (Cth) s 45, 45A, 76, 80 Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 75 FCR 238 referred to

Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 applied AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v ALSTOM AUSTRALIA LIMITED and ORS V553 OF 1999 AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v ABB TRANSMISSION AND DISTRIBUTION LIMITED and ORS V868 OF 2000 EMMETT J 7 APRIL 2004 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY V553 OF 1999

BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

APPLICANT

AND: ALSTOM AUSTRALIA LIMITED

(ACN 000 215 092)

SECOND RESPONDENT

WILSON TRANSFORMER COMPANY PTY LTD

(ACN 004 216 979)

THIRD RESPONDENT

DAVID TOOGOOD

FOURTH RESPONDENT

CHRIS TAPE

FIFTH RESPONDENT

PAUL GRABHAM

SIXTH RESPONDENT

R G ELLIOT

SEVENTH RESPONDENT

COLIN JAMES

EIGHTH RESPONDENT

ROBERT WILSON

NINTH RESPONDENT

DAVID PECK

TENTH RESPONDENT

DOUGLAS PITT

ELEVENTH RESPONDENT

ABB POWER TRANSMISSION PTY LTD (IN LIQ)

(ACN 000 102 616)

TWELFTH RESPONDENT

JUDGE: EMMETT J

DATE OF ORDER: 7 APRIL 2004

WHERE MADE: SYDNEY

THE COURT DECLARES THAT: 1. The conduct of the Twelfth Respondent, in making an arrangement or arriving at an understanding with the Second and Third Respondents in or around October 1993 that contained a provision that had the effect or likely effect of controlling the prices for some of the power transformers with ratings between 10 MVA and 200 MVA supplied by the parties to the arrangement or understanding to particular electricity utilities and industrial corporations ("the Power Transformer Arrangement") constituted the making of an arrangement or arriving at an understanding which contained a provision that, by the operation of s 45A of the Trade Practices Act 1974 (Cth) ("Act"), is for the purposes of s 45 of the Act deemed to have the effect or likely effect of substantially lessening competition, in contravention of s 45(2)(a)(ii). 2. The conduct of the Twelfth Respondent in implementing the Power Transformer Arrangement in the period from about late 1993 to about December 1995, by monitoring and comparing shares of power transformers with ratings between 10 MVA and 200 MVA supplied by the parties to the arrangement, by allocating particular forthcoming power transformer tenders between the Twelfth, Second and Third Respondents and by participating in conversations by which a representative of the party to whom a tender had been allocated informed representatives of the other two parties of the total cost at which it was going to tender constituted giving effect to an arrangement or understanding, which contained a provision that, by the operation of s 45A of Act, is for the purposes of s 45 of the Act deemed to have the effect or likely effect of substantially lessening competition, in contravention of s 45(2)(b)(ii). 3. The Eleventh Respondent engaged in conduct after he became Managing Director of the Twelfth Respondent in May 1994, being conduct of the kind referred to in ss 76(1)(e) and 80(1)(e) of the Act by being indirectly knowingly concerned in the contraventions of the Act by the Twelfth Respondent referred to in paragraph 2. 4. The conduct of the Fifth Respondent, during the period between October 1993 and 7 December 1993 by assenting to the participation of the Fourth Respondent, David Toogood, in an arrangement or understanding made between the Twelfth, Second and Third Respondents in or around November and December 1993 which contained a provision that had the effect or likely effect of controlling the prices for power transformers with ratings between 10 MVA and 200 MVA supplied by a party to the arrangement or understanding to particular electricity utilities and industrial corporations constituted being knowingly concerned in, or party to, contraventions by the Twelfth Respondent of s 45(2)(b)(ii) of the Act. THE COURT ORDERS THAT: 5. The Twelfth Respondent pay to the Commonwealth of Australia a pecuniary penalty under s 76 of the Act in the sum of $5,500,000 within 60 days of the date of this order. 6. The Eleventh Respondent pay to the Commonwealth of Australia a pecuniary penalty under s 76 of the Act in the sum of $100,000, such sum to be paid by 4 half-yearly instalments each of $25,000, with the first instalment to be paid within 180 days of the date of this order. 7. The Twelfth Respondent be restrained, for a period of 4 years, by its directors, servants and agents or otherwise howsoever, from: (a) making or arriving at; (b) giving effect to; (c) attempting to make or arrive at or give effect to; or (d) inducing, or attempting to induce, any person to make or arrive at or give effect to; or (e) being in any way, directly or indirectly, knowingly concerned in, or party to, the making or arriving at or giving effect to by any person of: any contract, arrangement or understanding between manufacturers or suppliers of power transformers which contains a provision that has the purpose, or has or is likely to have the effect, of fixing, controlling or maintaining prices for the supply of power transformers submitted by such manufacturers or suppliers to any purchasers of power transformers. 8. The Eleventh Respondent be restrained for a period of 4 years, from being in any way directly or indirectly knowingly concerned in, or party to: (a) the making or arriving at; or (b) the giving effect to; any contract, arrangement or understanding between manufacturers or suppliers of power transformers which contains a provision that has the purpose, or has or is likely to have the effect, of fixing, controlling or maintaining prices for the supply of power transformers submitted by such manufacturers or suppliers to purchasers of power transformers. 9. The Twelfth Respondent pay the Applicant's costs as agreed or taxed. 10. The Fifth Respondent pay to the Commonwealth of Australia a pecuniary penalty under s 76 of the Act in the sum of $60,000, such sum to be paid by 4 half-yearly instalments each of $15,000, with the first instalment to be paid within 180 days of the date of this order. 11. The Fifth respondent be restrained for a period of 4 years, from being in any way directly or indirectly knowingly concerned in, or party to: (a) the making or arriving at; or (b) the giving effect to; any contract, arrangement or understanding between manufacturers or suppliers of power transformers which contains a provision that has the purpose, or has or is likely to have the effect, of fixing, controlling or maintaining prices for the supply of power transformers supplied by such manufacturers or suppliers to purchasers of power transformers. AND THE COURT NOTES: The agreement between the First Respondent in proceeding V868 of 2000 and the Applicant that, in consideration of, among other things, the Applicant's agreement to make submissions jointly with the Twelfth Respondent that the pecuniary penalties set out in paragraphs 5 and 6 above are appropriate, reasonable and justified in the circumstances, the First Respondent in proceeding V868 of 2000 will discharge by payment to the Applicant on behalf of the Twelfth Respondent any liability on the part of the Twelfth Respondent to pay the Applicant's costs of this proceeding as agreed or taxed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.