Mackay Chapman March 2024 ACCC Update

In this month’s ACCC update:

• Review of past merger decisions reveals mixed outcomes;
• Celebrities are not getting rich from online investment trading platforms;
• Ultra Tune fined $1.5 million for contempt of court;
• CFMEU and Hutchinson appeals against boycott finding upheld;
• ACCC Supermarkets Inquiry invites consumer, farmer and industry stakeholders to participate; and
• Criminal sanctions imposed on Bingo, Aussie Skips and their former CEOs.

Review of Past Merger Decisions Reveals Mixed Outcomes

The ACCC has released findings from reviews of three past merger decisions completed in 2019, aiming to inform and improve its decision-making processes. 

The mergers examined include ANZ Terminals' acquisition of GrainCorp Liquid Terminals, AP Eagers Limited's acquisition of Automotive Holdings Group, and Bauer Media's acquisition of Pacific Magazines. 

While these mergers were not initially opposed by the ACCC, the review revealed some predictions didn't unfold as anticipated, particularly regarding the effectiveness of remedies offered by the parties. 

The ACCC highlights the importance of such reviews in shaping future approaches and advocates for compulsory information gathering powers to enhance analysis capabilities. 

The report is available on the ACCC's website, and the ACCC plans to continue reviewing past merger decisions.

Celebrities are Not Getting Rich From Online Investment Trading Platforms

In today's digital age, the National Anti-Scam Centre is sounding the alarm about a rising tide of online investment trading platform scams. With fake news articles and deep fake videos proliferating on social media, scammers are luring unsuspecting victims into their traps. Last year alone, Australians reported losses exceeding $8 million to these schemes, with heartbreaking stories like one man losing $80,000 in cryptocurrency after falling for a deep fake Elon Musk video.

The most common scam brands include 'Quantum AI', 'Immediate Edge', and others promising hefty returns through bogus trading platforms. To combat this, the Anti-Scam Centre, led by the ACCC and ASIC, is actively disrupting these scams and working to remove fraudulent ads from social media platforms.

Understanding how these scams operate is crucial. Victims are enticed through advertisements and fake news articles, leading them to a scam website where they're asked for an initial investment, typically around $250. As trust builds, scammers push for more significant investments, often locking victims out of their accounts when they attempt to withdraw funds.

Protecting oneself is paramount. Stop, think, and act swiftly if anything feels off. Never give out personal information or act hastily on social media investment advice. Take time to research and verify investment opportunities before committing any funds. Additionally, reporting scams to Scamwatch can help prevent others from falling victim to these schemes.

For those who have been targeted or affected by scams, immediate action is necessary. Contact your bank and consider seeking immediate, expert legal advice from lawyers experienced in fraud - there may be an opportunity to get your money back if you move fast. In the aftermath of a scam targeting you, seek emotional support through crisis helplines like Lifeline or Beyond Blue, and report the incident to Scamwatch.

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‍Ultra Tune Fined $1.5 million for Contempt of Court

The Federal Court of Australia has fined Ultra Tune Australia Pty Ltd (Ultra Tune) a record $1.5 million for contempt of court, marking the highest penalty ever imposed for contempt in an ACCC case. 

Ultra Tune was previously found to have breached consumer law and franchising regulations in 2019, leading to court orders requiring compliance with the Franchising Code. Despite these orders, Ultra Tune failed to meet deadlines for disclosure documents and marketing fund statements, violating court directives. 

Justice Bromwich noted that these breaches reflected Ultra Tune's corporate character, highlighting its lack of concern for compliance. ACCC Commissioner Liza Carver emphasised the importance of timely compliance with franchise regulations, stating that the fines demonstrate the necessity of adhering to court orders. 

Ultra Tune's history of non-compliance led to the court awarding ACCC costs on an indemnity basis. Ultra Tune, a car servicing franchisor operating across Australia, previously faced penalties for similar breaches in 2019, prompting the court to order a compliance program. In June 2022, the ACCC initiated contempt proceedings against Ultra Tune for failing to comply with court orders.

CFMEU and Hutchinson Appeals Against Boycott Finding Upheld

The Full Federal Court has overturned an earlier judgement in favour of the ACCC, upholding appeals by the Construction, Forestry and Maritime Employees Union (CFMEU) and construction company J Hutchinson Pty Ltd. 

The trial judge's finding that CFMEU and Hutchinson had entered into a boycott agreement at a Brisbane construction site in 2016, was overturned, on the basis that there was insufficient evidence to support inferring such an agreement. 

ACCC Chair Gina Cass-Gottlieb expressed disappointment, emphasising that boycott conduct is illegal and can stifle competition in the construction industry, leading to inflated costs. 

The ACCC is reviewing the Full Court's judgement.

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‍ACCC Supermarkets Inquiry Invites Consumer, Farmer and Industry Views

The ACCC is seeking input from consumers and industry stakeholders in its inquiry into Australia's supermarket sector. 

As part of this inquiry, an online survey has been released for consumers to share their shopping experiences and concerns about major supermarkets. Additionally, the ACCC has published an issues paper outlining key topics the inquiry will address and is inviting submissions from farmers, wholesalers, retailers, and other interested parties. 

The inquiry will focus on various issues, including competition between supermarkets, pricing strategies, loyalty programs, online shopping trends, and impact on grocery supply chains. Stakeholders can provide feedback via the online survey and submissions process until 2 April 2024. 

Further information is available on the ACCC's website.

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Criminal Sanctions Imposed on Bingo, Aussie Skips and Their Former CEOs Daniel Tartak and Emmanuel Roussakis for Skip Bin and Waste Processing Cartel

The Federal Court has convicted waste management companies Bingo Industries and Aussie Skips Bin Services and Recycling, along with their former executives, for criminal cartel offences related to a price-fixing arrangement in Sydney's demolition waste services sector. 

Following an investigation by the ACCC and referrals to the Commonwealth Director of Public Prosecutions, Bingo was convicted and fined $30 million and Aussie Skips $3.5 million for their role in fixing prices for skip bins and waste processing services. Bingo's former Managing Director, Daniel Tartak, and Aussie Skips' former CEO, Emmanuel Roussakis, were also each convicted and sentenced to terms of imprisonment, to be served as intensive corrections orders (including significant community service), fined and banned from managing corporations for five years. 

Mr Tartak received a two-year intensive correction order with 400 hours community service, a $100,000 fine and a five-year ban from managing corporations, while Mr Roussakis also received a two year intensive correction order, with 300 hours community service, a $75,000 fine and a five year ban.  

In sentencing, Justice Wigney highlighted the detrimental impact of cartels on consumers and the economy, emphasising the importance of deterring such conduct. The cartel operated from May to August 2019, fixing prices for waste services in Sydney.  The penalties demonstrate the seriousness of cartel conduct and the significant penalties breaches of the law will attract, reflective of the potential harm it poses to consumers and in stifling competition. 

The ACCC's investigation began after complaints about price increases coinciding with the introduction of a government levy.

Bingo operates across New South Wales, Victoria, and Queensland, while Aussie Skips provides services in Sydney. The legal proceedings against Bingo and Mr Tartak commenced in August 2022, with guilty pleas entered in October 2022. Aussie Skips and Mr Roussakis were charged in December 2022, with guilty pleas entered in February 2023. 

Cartel conduct, including price-fixing, bid-rigging, and market sharing, is a serious offence under Australian law, with severe penalties for corporations and individuals involved. The ACCC investigates cartel conduct and collaborates with the CDPP to prosecute criminal offences. 

The ACCC encourages the public to report suspected cartel conduct through confidential channels provided by it.

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The contents of this article do not constitute legal advice and it is not intended to be a substitute for legal advice and should not be relied upon as such.  It is designed and intended as general information in summary form, current at the time of publication, for general informational purposes only.  You should seek legal advice or other professional advice in relation to any particular legal matters you or your organisation may have.

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