Terry Calvani

Adelaide—18 October 2009

CUSTODIAL SANCTIONS FOR CARTEL CUSTODIAL SANCTIONS FOR CARTEL OFFENCES: OFFENCES: An Appropriate Sanction for Australia?An Appropriate Sanction for Australia?

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My new best friend Vincent of Cleland

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Australia House LondonAldwych, The Strand

2003—

ACCC invitesOffice of Fair Trading & IrishCompetition Authority to discuss the Dawson Reportwith officials of the Treasury.

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Waiting for Godot ?

The Dawson Report

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CUSTODIAL SANCTIONS FOR CARTEL OFFENCES:An Appropriate Sanction in Australia?

byTerry Calvani

&Torello H. Calvani

Introduction.†

Brazil, Canada, Estonia, Ireland, Israel, Korea, Japan, Russia, the United States, the United Kingdom and now Australia criminalize price-fixing.[1] The laws of each provide for custodial sentences as an appropriate sanction. What lessons can Australian judges, enforcement officials, lawyers and their clients draw from the experiences of these other jurisdictions? We seek to explore those issues here.

Of Counsel, Freshfields Bruckhaus Deringer LLP US. Formerly Member (of Board of Directors holding the criminal cartel portfolio), The Competition Authority of Ireland (2002-05); Commissioner of the United States Federal Trade Commission (1983-2000).

Associate, O’Melveny & Myers LLP. † The views expressed are those of the authors and do not necessarily reflect those of their firms. The authors wish to thank Peter Toy of the Australian Competition and Consumer Commission and Wouter Wills of the

European Commission for their thoughtful comments. We also appreciate the comments of James B. Musgrove (Canadian law), Amadeu Ribeiro Carvalhaes and Barbara Rosenberg (Brazilian law), Akinori Uesugi and Kaori Yamada (Japanese law), Hoil Yoon (Korean law), Alexander Viktorov and Elena Terentieva (Russian law). We also thank Carolyn Galbreath and David McFadden of the Irish Competition Authority (Irish law) and Simon Williams of the U.K. Office of Fair Trading (U.K. law) for their comments. The senior author previously published articles on the Irish experience with cartel sanctions. This article’s discussion of deterrence draws on that work. See Cartel Penalties & Damages in Ireland: Criminalisation and the Case for Custodial Sentences in Criminalization of Competition Law Enforcement: Economic & Legal Implications for the EU Member States 270 (Cseres et al eds. 2006) and Enforcement of Cartel Law in Ireland, Annual Proceedings of the Fordham Corporate Law Institute 1 (Hawk ed. 2004).

[1] Under U.S. case law, the terms “price-fixing,” “cartel behaviour” and the like refer to that set of competition offences generally grouped under the heading of “hard-core” violations and include price-fixing itself, bid-rigging, and the allocation of markets whether by geography, customer or product. By “price,” we refer to the net price. Thus an agreement among sellers on credit terms or “free” delivery would be included. b

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TODAY’S AGENDA

1. Custodial sanctions as a deterrent.

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