Steeling the Show: BlueScope issued with Australian record $57.5 million penalty for attempted price fixing

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.