BlueScope Steel's (ASX:BSL) concise three-paragraph statement to the ASX regarding a substantial $57.5 million fine in the Federal Court raises eyebrows. The company's terse announcement attributed the penalty to "civil proceedings brought by the ACCC against BlueScope and one of its former employees."
The Court, in its decision, imposed a landmark $57.5 million penalty on BlueScope, marking the highest fine ever imposed for cartel conduct in Australia. BlueScope has a limited window of 28 days to appeal the judgment if it chooses to do so.
The Australian Competition and Consumer Commission (ACCC) provided a more comprehensive statement later that day, elucidating that the substantial fine set a new precedent for cartel-related penalties in the country. Additionally, a $575,000 penalty was levied on Jason Ellis, BlueScope's former general manager, a sum that cannot be recouped through insurance, underscoring the accountability of individuals involved in such conduct.
Justice O’Bryan emphasized the significance of the penalty's deterrence factor, stressing that the severity of the penalty should not be undermined by insurance provisions that shield directors and officers from financial consequences.
This recent penalty decision follows BlueScope and Mr. Ellis' conviction in December of attempting cartel conduct and price-fixing concerning the supply of flat steel products. A comprehensive judgment handed down by Justice Michael O’Bryan in late 2021 validated most of ACCC's claims in the civil case.
In the face of the findings, ACCC Commissioner Liza Carver asserted that BlueScope and its former executive endeavored to induce competitors into price-fixing arrangements that would curtail price competition, consequently driving up prices for flat steel products. Carver's statement serves as a clear warning to companies and individuals about the repercussions of attempting to engage in cartel conduct, reinforcing the potential for serious legal consequences, both civil and criminal.
The verdict also has implications for future cases of attempted cartel conduct, with the ACCC poised to leverage this decision as a precedent. The costs of the ACCC's efforts were mandated to be borne by BlueScope and Mr. Ellis.
