ACCC action over alleged market sharing cartel in the overhead crane industry

The Australian Competition and Consumer Commission (ACCC) has commenced civil proceedings in the Federal Court against Queensland overhead crane company NQCranes Pty Ltd, alleging it engaged in cartel conduct in contravention of the Competition and Consumer Act.

According to the ACCC website, cartel conduct occurs when businesses agree to act together instead of competing with each other. It could be an agreement between competitors to price fix, share markets, rig bids and/or control output or limit the amount of goods and services supplied. It is the responsibility of the ACCC to investigate such conduct and decide how to pursue civil cartel proceedings at a federal level.

The ACCC alleges that, following a series of meetings, phone calls and emails, NQCranes entered into a signed agreement with a competitor in the overhead crane market in August 2016. Purportedly, this included a ‘distributorship agreement’ of ‘mutual benefit’ to share the market by not targeting each other’s customers for overhead crane parts and servicing in Brisbane and Newcastle.

ACCC chairman Rod Sims said, “It is illegal for any corporation to make cartel agreements with its competitors, whether they are well known multinationals, or small businesses operating in regional areas. NQCranes was competing for business with a competitor when we allege they agreed to divide the market and not to target each other’s customers. 

Market sharing is serious, anti-competitive behaviour which harms consumers, other businesses and the economy in general. Enforcing cartel laws is an important enduring priority for the ACCC, no matter what type of business is involved.”

The maximum civil penalty, which can be ordered by the Court under the Competition and Consumer Act for each breach of the cartel laws, is the greater of:

• AU$10 million;
• three times that total value of the benefits that have been obtained and are reasonably attributable to the commission of the offence, if this can be determined; or
• 10% of the company’s annual turnover in Australia.

Privately owned NQCranes has grown over the last 30 years to eight branch locations and more than 100 staff to become one of Australia’s largest independent overhead crane service business.