The Federal Court has ordered that overhead crane company NQ Cranes Pty Ltd pay a $1 million penalty after NQ Cranes admitted that it had entered into an anti-competitive cartel agreement with a competitor, in proceedings brought by the ACCC.
NQ Cranes admitted contravening the Competition and Consumer Act by entering into a cartel agreement with a competitor that had the purpose of allocating overhead crane service customers in parts of Queensland and the Newcastle region.
In a 'distributorship agreement', signed in August 2016, the competitors agreed to co-operate in the market for servicing overhead cranes by not targeting each other's current customers in parts of Queensland and in Newcastle. The agreement also stated the companies would instead focus on competing against other companies in the industry, instead of each other.
"This explicit written agreement to share the market was clearly anti-competitive and had the potential to limit the service options available to the many businesses that use overhead cranes," ACCC Commissioner Liza Carver said.
"Businesses are reminded that the ACCC will investigate and take appropriate enforcement action not just against large corporates or multi-nationals. We will carefully examine any allegation of attempts to interfere with free competition by engaging in cartel conduct, and we encourage businesses which have concerns about activities in their markets to contact us confidentially."
"All businesses should be aware of their obligations under the Competition and Consumer Act, and be proactive in ensuring compliance with the law," Ms Carver said.
NQ Cranes, which made joint submissions with the ACCC to the Court on penalty and other orders, was also ordered to pay part of the ACCC's costs and establish and implement compliance program.
Background
NQCranes is a privately owned overhead crane company which designs, services and manufactures cranes. It is based in Mackay, Queensland, and has operations across Queensland and parts of New South Wales. It provides lifting equipment to a variety of industries, including the mining, steel and defence industries. It describes itself as Australia's largest independent overhead crane company.
Operators in the crane industry manufacture overhead cranes and gantry cranes. Many of the products, including crane steelwork, hoists, electrics and drives of cranes, are specifically manufactured to meet a client's needs. Operators frequently provide installation, maintenance and repair services.
Overhead cranes are fixed indoor cranes used to handle heavy loads. They are usually installed in large warehouses and often used as part of the production process, as well as in storage facilities, mining and construction projects.
Note
Market sharing is cartel conduct and happens when competitors agree to divide a market between themselves so they don't have to compete. They may agree to avoid producing each others' goods or services, serve different geographical areas; divide contracts by value, or assign customers to each competitor, with an understanding not to win each other's customers.
More information about different types of cartel conduct can be found on the ACCC's website at Cartels.
The ACCC investigates cartel conduct and can take civil cartel proceedings in the Federal Court or refer serious cartel conduct to the Commonwealth Director of Public Prosecutions.
The ACCC works to detect cartels including through education programs, proactive intelligence gathering and data assessment and working with overseas counterparts to identify cartels that operate on a global level.
The ACCC also manages an immunity program that enables past or present cartel members to confess their actions and cooperate with investigations in exchange for immunity from civil cartel proceedings brought by the ACCC and criminal cartel charges laid by the Commonwealth Director of Public Prosecutions (CDPP).
Anyone who thinks they may be involved in cartel conduct is urged to call the ACCC Cartel Immunity Hotline on (02) 9230 3894. More information about the immunity process is available on the ACCC website at Cartels.
You can also report cartel conduct by using the anonymous cartel portal.
