Steeling the Show: BlueScope issued with Australian record $57.5 million penalty for attempted price fixing
Written By
Special Counsel
Australia
I am a Special Counsel in the Commercial Group based in our Sydney office. I specialise in advising our clients within the technology and communications sector.
Associate
Australia
I am an associate in our Corporate and Commercial Group in Sydney, advising technology and communications clients on a range of commercial and regulatory matters.
Partner
Australia
As a partner in our Competition and Commercial Groups in Sydney, and co-head of the Technology and Communications Group in Australia, I specialise in cross-jurisdictional regulatory issues in technology and communications.
On 29 August, the Federal Court of Australia ordered that BlueScope Steel Limited (BlueScope) pay a penalty of $57.5 million AUD for attempted price fixing. This is the highest penalty ever ordered by an Australian court in relation to cartel conduct. In addition, former BlueScope general manager, Jason Ellis, was also ordered to pay $575,000 AUD.
Background
In December 2022, the Federal Court found that BlueScope and Mr Ellis had attempted to enter into price fixing agreements in contravention of Australia’s cartel laws. The conduct had occurred between September 2013 and June 2014; BlueScope and Mr Ellis had attempted to induce seven Australian distributors, one Australian importer, and one overseas manufacturer to enter into a price fixing arrangement in relation to the supply of flat steel products.
The Penalty
In considering the amount with which to penalise BlueScope and Mr Ellis, Justice O’Bryan had regard to the circumstances and seriousness of the conduct, particularly the level of BlueScope management that was involved in the conduct, the size and financial position of BlueScope, the potential of the conduct to occasion significant loss and damage, and the likely substantial gains that the conduct would have delivered to BlueScope.
While His Honour noted BlueScope’s previously clean record in relation to competition law, and its serious efforts to strengthen compliance processes after the contraventions in question, the balancing of all relevant factors nonetheless necessitated that:
“Only a substantial penalty for each of the attempts to induce cartel conduct will serve the objectives of specific and general deterrence.”
In respect of the penalty imposed on Mr Ellis, it is notable that the Court’s orders prevent the recovery of the amount under any insurance policy. The Court considered such an order necessary to ensure that the sting or burden of the penalty, and its consequent deterrent effect, is not undermined.
The Federal Court of Australia’s decision is available here.
For more information, please contact Thomas Jones, Matthew Bovaird, or Patrick Cordwell.
