Privet Enforcement of Competition Law in Australia & Caron Beaton Wells - Law Assignment Help

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CARON BEATON-WELLS

The recently concluded independent review of Australian competition policy, law and institutions led by Professor Ian Harper examined proposals in relation to private enforcement of the competition rules. That private actions for damages were even on the review agenda is a positive development in an area that has long escaped the attention of policymakers and enforcement leaders in this country.

However, the Harper recommendations for private enforcement-related reforms are sparse and, in general terms, the Harper Panel’s treatment of the topic fails to grapple with many of the major challenges facing private litigants — especially small businesses and consumers. This article is a critical analysis of the Harper Panel’s consideration of private competition law enforcement.

It explains the significant impediments hampering private litigation in this field, critically analyses the Harper Panel’s examination of the issues, and compares the approaches that have been taken in overseas jurisdictions — Europe particularly. It concludes that in the absence of a more concerted effort to confront and overcome the obstacles, the potential of private enforcement to compensate for past harm and deter future harm from anti-competitive conduct is likely to remain largely untapped.

1 See CCA s 82.

2 This scheme is provided for in pt IVA of the FCAA.

3 A review of the Australian Trade Practices Reporter series (renamed the Australian Competition and Consumer Law Reporter in 2011) identified 106 proceedings involving alleged contraventions of the competition provisions of the TPA and CCA over the period 2000–14 (inclusive). Of these, only 28 (approximately 26 per cent) were brought by private applicants (this figure does not include proceedings that were settled; and nor, of course, does it include instances in which ‘compensation’ was negotiated without the need to bring proceedings). Cf Independent Committee of Inquiry into National Competition Policy, National Competition Policy (1993) 335 (‘Hilmer Report’), where the Hilmer Report predicted that the competition rules would be enforced by private actions in ‘most cases’.

4 Vince Morabito, ‘An Empirical Study of Australia’s Class Action Regimes: Third Report — Class Action Facts and Figures — Five Years Later’ (Research Report, Australian Research Council, November 2014) 10–11. According to Morabito’s study, between 1992 and 2014 approximately 18.2 per cent of the 329 class actions brought under pt IVA of the FCAA were product liability cases followed by industrial and workplace claims (15.5 per cent) whilst investor cases constituted 14.2 per cent of all class actions: at 10. Since 2003, there has been a marked increase in shareholder claims (22.1 per cent), as well as a growing number of claims relating to impugned investment advice (24.1 per cent) and consumer protection (13.4 per bolster detection and deterrence have focused primarily on a model of public enforcement).

In 2010 the author held a roundtable of stakeholders at the University of Melbourne with the aim of thrashing out tensions between public and private modes of enforcement: Melbourne Law School, Competition Law & Economics Network, Roundtable — Private Enforcement (15 November 2010) The University of Melbourne . Treasury and ACCC officials attended the roundtable. Subsequently in 2012 the Treasury convened a meeting of members of the Law Council of Australia (including the author) and the ACCC to discuss several aspects of private competition law enforcement, at which a representative of the Attorney-General’s Department.

This is surprising given that the ACCC generally prides itself on tracking closely and emulating, if not leading, international best practice in its enforcement activity. Further, in its Compliance and Enforcement Policy, it identifies one of its primary aims as being to ‘where possible … undo the harm caused by the contravening conduct (for example, by corrective advertising or securing redress for consumers and businesses adversely affected)’.

10 Yet the ACCC takes almost no action to secure compensation on behalf of victims of anti-competitive conduct (despite having significant powers to do so)11 and its own enforcement efforts produce results (largely in the form of pecuniary penalties) that arguably have weak deterrent effects.12 In the United States, by comparison, private actions have been seen as an essential complement to enforcement action by public authorities since the inception of competition (antitrust) laws in that jurisdiction in the late 19th century.

13 As the United States Supreme Court saw it, ‘the purposes of forcement: Why We Should Care if It’s Not Fair’, in Paul Nihoul and Tadeusz Skoczny (eds), Procedural Fairness in Competition Proceedings (Edward Elgar, 2015) .

Antitrust laws are best served by insuring that the private action will be an ever-present threat to deter anyone contemplating business behavior in violation of the antitrust laws’.14 Early and sustained recognition by the government and judiciary of the vital role played by private plaintiffs in promoting both the deterrent and compensatory functions of enforcement generated an environment conducive to private actions.15 This is especially so in respect of class actions which are seen as playing an important role in the context of antitrust enforcement.16 The results of this official recognition and support for private antitrust enforcement in the United States speak for themselves. Approximately 90 per cent of antitrust cases brought in the United States are initiated by private litigants,17 and studies relating to litigation outcomes in international cartel cases in North America show that private settlements represent roughly 2.6 times the penalties levied by public authorities.

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