Wednesday, 21 October 2015

Cartels? What cartels?

I spent last weekend at the latest Competition Law and Policy Institute of NZ's annual workshop, and I'll write up some of the (interesting) proceedings when I've got a moment. But as a hold the fort exercise, I'll just ask this, based on some thoughts I had at the workshop.

Where are the cartels? Or more specifically, where are the Aussie cartels?

The reason I raise it, is that Australia criminalised cartels in 2009. And since then, I'm told, there hasn't been a single criminal prosecution of a Aussie cartel. None. Nada. Zip.

Why could that be?

Proponents of criminalisation will no doubt feel they know the answer: the prospect of sharing a cell in Long Bay with Mad Reggie.

But it might be happenstance. Cartels don't get rumbled to order. They're like buses - none for ages, next minute you've got your pick of them.

Or - or - criminalisation might have driven cartels into deep, deep cover.

This is definitely one of those unknown unknowns, but it's at least possible that criminalisation, plus recent terabuck penalties in the US and Europe and the associated humongous civil liability, have altered the calculations for price fixers who might otherwise have ratted out their co-conspirators. Now, you have to be very, very, very confident indeed that the regulators' leniency policy will see you right.

Especially on the criminal side, where you don't want to run into some grandstanding crown prosecutor who isn't too sold on all this leniency stuff.

'Cos Reggie, he ain't much into leniency either.

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