INSIGHT

CDPP discontinues criminal proceedings against ANZ and Rick Moscati; and other developments

By Jacqueline Downes
ACCC Consumer law Infrastructure Technology Telecommunications

The latest in competition and consumer law 7 min read

The CDPP discontinued criminal proceedings against ANZ and Rick Moscati in relation to criminal cartel charges.

The ACCC authorised Commercial Radio Australia and its members to collectively negotiate with Google and Facebook about payments for their news content published on the platforms.

Christopher Kenneth Joyce, the former export manager of pharmaceutical ingredient company Alkaloids of Australia Pty Ltd, plead guilty to criminal cartel conduct.

The Federal Court ordered Agrison to pay a penalty of $220,000 and compensation to consumers totalling $64,000 for making false or misleading representations to customers about warranties and after-sales services.

The Federal Court granted the ACCC an interlocutory injunction to restrain Virtus Health from completing its acquisition of Adora Fertility until the proceedings brought by the ACCC are finalised.

The ACCC commenced civil proceedings against First Class Slate Roofing and RAD Roofing Specialists (trading as Mr Shingles), and their sole directors for alleged cartel conduct.

CDPP discontinues criminal proceedings against ANZ and Rick Moscati

On 29 October 2021, the CDPP discontinued criminal proceedings against ANZ and Rick Moscati in relation to criminal cartel charges. ANZ and Mr Moscati had been charged with aiding, abetting, counselling or procuring JP Morgan to give effect to an alleged cartel arrangement relating to trading in ANZ shares held by JP Morgan, Deutsche Bank and Citigroup. The prosecution of Deutsche Bank, Citigroup and four of their senior executives continues. Allens acted for ANZ in these proceedings.

Commercial Radio Australia given the green light to collectively bargain with Google and Facebook

On 29 October 2021, the ACCC authorised Commercial Radio Australia (CRA) and its members to collectively negotiate with Google and Facebook about payments for their news content published on the platforms.

This authorisation follows the interim authorisation granted to CRA and its members in September this year, and an earlier decision of the ACCC to grant authorisation to Country Press Australia to collectively bargain with Google and Facebook in August this year.

The authorisation will span ten years, allowing the CRA to collectively negotiate with the platforms on behalf of its members without breaching competition laws. Ultimately, such conduct may be exempt from the Competition and Consumer Act in the future under the News Media and Digital Platforms Mandatory Bargaining Code (the Code), which includes an exemption for registered news businesses to collectively bargain with designated digital platforms. Legislation enacting the Code was passed in February this year, but the operative provisions of the Code have not yet come into effect, as no digital platforms have been designated by the Treasurer.

First individual pleads guilty to criminal cartel charges

On 26 October 2021, Christopher Kenneth Joyce, the former export manager of pharmaceutical ingredient company Alkaloids of Australia Pty Ltd, plead guilty to criminal cartel conduct. The charges relate to price fixing, bid rigging and market allocation cartel arrangements between Alkaloids of Australia and other overseas suppliers of a pharmaceutical ingredient used in antispasmodic medications. Mr Joyce is the first individual to plead guilty to criminal cartel charges since the laws came into effect in 2009 and has been committed to the Federal Court for sentencing. Alkaloids of Australia Pty Ltd has not yet entered its plea.

Aftermath of after-sales promises: Agrison ordered to pay penalty and compensation for misleading representations

On 26 October 2021, the Federal Court ordered Agrison to pay a penalty of $220,000 and compensation to consumers totalling $64,000 for making false or misleading representations to customers about warranties and after-sales services.

Agrison admitted to making a number of false or misleading representations, namely:

  • that its tractors had a five-year warranty; and
  • that if the tractor had defects, Agrison would provide replacement parts at no cost to the customer for a period of five years; and
  • that Agrison had a national service network which enabled customers to obtain all necessary spare parts for tractors within a reasonable time.

In reality, not all parts were covered for five years, and the full cost was often not covered. Agrison also did not have a national service network, and had no reasonable grounds for making the claim about the availability of spare parts. The court found that Agrison’s conduct was deliberate and it was not isolated, having occurred over several years.

The court also made a number of orders requiring Agrison to:

  • publish a corrective notice on its website regarding the outcome of the ACCC action;
  • refrain from making any further unqualified representations about the scope of the warranty; and
  • provide consumer law training to its staff.

Agrison also provided the ACCC with a court-enforceable undertaking to set up an electronic complaints system and regularly report on complaints received and how they were resolved. The sole director of Agrison is also subject to an undertaking not to be involved in any business selling tractors for five years, without the ACCC's consent.

Federal Court restrains Virtus Health from completing its acquisition of Adora Fertility 

On 25 October 2021, the Federal Court granted the ACCC an interlocutory injunction to restrain Virtus Health (Virtus) from completing its acquisition of Adora Fertility (Adora) until the proceedings brought by the ACCC are finalised. Both Virtus and Adora are providers of IVF services and operate fertility clinics in Brisbane, Sydney and Melbourne.

Virtus had originally intended to complete its acquisition of Adora on 15 October 2021 despite the ACCC's ongoing review of the transaction. In commencing proceedings on 13 October 2021, the ACCC indicated significant concerns with the transaction, arguing that it would increase Virtus' already significant market share in Brisbane and Melbourne and that Adora is a vigorous low-cost competitor.

The court found that there was a prima facie case that the transaction would substantially lessen competition and granted the interlocutory injunction. In reaching this decision, the court accepted the ACCC's argument that a 'hold separate' undertaking proposed by Virtus was inadequate and was unlikely to have been effective in maintaining Adora as a vigorous and effective competitor.

The matter is listed for trial for final determination on the first available date convenient to the court after 31 January 2022.

ACCC slates alleged roof tiling cartel participants

On 25 October 2021, the ACCC commenced civil proceedings against First Class Slate Roofing (First Class) and RAD Roofing Specialists (trading as Mr Shingles), and their sole directors for alleged cartel conduct. Both First Class and Mr Shingles provide slate roofing services in Sydney. The ACCC alleges that First Class, Mr Shingles and their directors colluded to rig bids for tenders in exchange for cash payments to one another, in order to increase the likelihood of one of the parties winning the tender. This conduct is alleged to have occurred in respect of two specific construction projects; Wesley College at the University of Sydney and a residential building project at Bellevue Hill.