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Competition and Consumer Act 2010 (Cth)

Section 76
Pecuniary penalties

 

The provision

(1) If the Court is satisfied that a person:

(a) has contravened any of the following provisions:

(i) a provision of Part IV (other than section 44ZZRF or 44ZZRG);

(ia) section 55B;

(ii) section 60C

(iia) section 60K

(iii) section 95AZN;

(iv) a civil penalty provision of an industry code; or

(b) has attempted to contravene such a provision; or

(c) has aided, abetted, counselled or procured a person to contravene such a provision; or

(d) has induced, or attempted to induce, a person, whether by threats or promises or otherwise, to contravene such a provision; or

(e) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision; or

(f) has conspired with others to contravene such a provision;

the Court may order the person to pay to the Commonwealth such pecuniary penalty, in respect of each act or omission by the person to which this section applies, as the Court determines to be appropriate having regard to all relevant matters including the nature and extent of the act or omission and of any loss or damage suffered as a result of the act or omission, the circumstances in which the act or omission took place and whether the person has previously been found by the Court in proceedings under this Part or Part XIB to have engaged in any similar conduct.

Note: Section 87AA provides that, if boycott conduct is involved in proceedings, the Court must have regard to certain matters in exercising its powers under this Part. (Boycott conduct is defined in subsection 87AA(2).)

(1A) The pecuniary penalty payable under subsection (1) by a body corporate is not to exceed:

(aa) for each act or omission to which this section applies that relates to section 44ZZRJ or 44ZZRK - the greatest of the following:

(i) $10,000,000;

(ii) if the court can determine the total value of the benefits that have been obtained (within the meaning of Division 1 of Part IV) by one or more persons and that are reasonably attributable to the act or omission - 3 times that total value;

(iii) if the Court cannot determine the total value of those benefits - 10% of the annual turnover (within the meaning of Division 1 of Part IV) of the body corporate during the period (the turnover period) of 12 months ending at the end of the month in which the act or omission occurred; and

(a) for each act or omission to which this section applies that relates to section 45D, 45DB, 45E or 45EA - $750,000; and

(b) for each act or omission to which this section applies that relates to any other provision of Part IV—the greatest of the following:

(i) $10,000,000;

(ii) if the Court can determine the value of the benefit that the body corporate, and any body corporate related to the body corporate, have obtained directly or indirectly and that is reasonably attributable to the act or omission - 3 times the value of that benefit;

(iii) if the Court cannot determine the value of that benefit—10% of the annual turnover of the body corporate during the period (the turnover period) of 12 months ending at the end of the month in which the act or omission occurred; and

(ba) for each act or omission to which this section applies that relates to section 55B, 60C or 60K - 6,471 penalty units; and

(c) for each act or omission to which this section applies that relates to section 95AZN - $33,000; and

(ca) for each act or omission to which this section applies that relates to a civil penalty provision of an industry code--the amount set out in the civil penalty provision of the industry code; and

(d) for each other act or omission to which this section applies - $10,000,000.

Note: For annual turnover, see subsection (5).

(1B) The pecuniary penalty payable under subsection (1) by a person other than a body corporate is not to exceed:

(aa) for each act or omission to which this section applies that relates to section 55B, 60C or 60K - 1,295 penalty units; and

(a) for each act or omission to which this section applies that relates to section 95AZN - $6,600; and

(aaa) for each act or omission to which this section applies that relates to a civil penalty provision of an industry code--the amount set out in the civil penalty provision of the industry code; and

(b) for each other act or omission to which this section applies - $500,000.

(2) Nothing in subsection (1) authorises the making of an order against an individual because the individual has contravened or attempted to contravene, or been involved in a contravention of, section 45D, 45DA, 45DB, 45E or 45EA.

(3) If conduct constitutes a contravention of two or more provisions of Part IV (other than section 44ZZRF or 44ZZRG), a proceeding may be instituted under this Act against a person in relation to the contravention of any one or more of the provisions but a person is not liable to more than one pecuniary penalty under this section in respect of the same conduct.

(4) The single pecuniary penalty that may be imposed in accordance with subsection (3) in respect of conduct that contravenes provisions to which 2 or more of the limits in paragraphs (1A)(aa), (a) and (b) apply is an amount up to the highest of those limits.

Annual turnover

(5) For the purposes of this section, the annual turnover of a body corporate, during the turnover period, is the sum of the values of all the supplies that the body corporate, and any body corporate related to the body corporate, have made, or are likely to make, during that period, other than:

(a) supplies made from any of those bodies corporate to any other of those bodies corporate; or

(b) supplies that are input taxed; or

(c) supplies that are not for consideration (and are not taxable supplies under section 72­5 of the A New Tax System (Goods and Services Tax) Act 1999); or

(d) supplies that are not made in connection with an enterprise that the body corporate carries on; or

(e) supplies that are not connected with Australia.

(6) Expressions used in subsection (5) that are also used in the A New Tax System (Goods and Services Tax) Act 1999 have the same meaning as in that Act.

 

Legislative history

Amended by Competition and Consumer Amendment (Payment Surcharges) Act 2016 (Act 9 of 2016)

Inserted references to s 55B

The current penalty regime for contraventions of Part IV of the Act was inserted by Trade Practices Amendment (Cartel Conduct and Other Measures) Act 2009 (Act 59 of 2009)

More history forthcoming

 

Commentary

In ACCC v Visy Industries Holdings Pty Ltd (No 3) [2007] FCA 1617 (2 November 2007) Justice Heerey noted the factors to be taken into account by s 76(1) when determining penalties. He also noted other factors that outght to be taken into account. Collectively, the factors to consider are:

(i) the nature and extent of the act or omission constituting the contravening conduct; (para 302; reflecting s 76(1))

(ii) the nature and extent of any loss or damage suffered as a result of the contravening conduct; (para 302; reflecting s 76(1))

(iii) the circumstances in which the act or omission took place; and (para 302; reflecting s 76(1))

(iv) whether the contravenor has previously been found by the Court to have engaged in similar conduct. (para 302; reflecting s 76(1))

(v) the size of the contravening company; (para 303)

(vi) the degree of its power, evidenced by its market share and the ease of entry into the market; (para 303)

(vii) the deliberateness of the contravention and the period over which it extended; (para 303)

(viii) whether the contravention arose out of the conduct of senior management or at a lower level; (para 303)

(ix) whether the company had a corporate culture conducive to compliance with the Act, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention; (para 303)

(x) whether the contravenor has shown a disposition to co-operate with the authorities responsible for the enforcement of the Act in relation to the contravention; (para 303)

(xi) similar conduct in the past; (para 303)

(xii) financial position; (para 303)

(xiii) deterrent effect. (para 303)

 

Cases

ACCC v Visy Industries Holdings Pty Ltd (No 3) [2007] FCA 1617 (2 November 2007)
Penalties of $36m imposed for price fixing (principles discussed)
Note: at the time this case was decided the maximum penalty applicable was $10m for a coroporation and $500,000 for an individual.

NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; 71 FCR 285
Penalties - agreed penalties - principles

External linkTPC v CSR Ltd [1990] FCA 521; (1991) ATPR 41-076
Misuse of market power - pecuniary penalties