BlueScope has been fined a record $57.5 million for attempting to fix prices for flat steel products, a record penalty for cartel conduct in Australia.
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The Federal Court has also ordered the company's former general manager of sales and marketing, Jason Ellis, to pay $575,000, an amount that by court order cannot be covered by insurance.
In December the court found that BlueScope and Ellis had tried to induce nine competing suppliers to enter agreements to fix and/or raise the level of pricing for flat steel products between September 2013 and June 2014.
Justice Michael O'Bryan said the conduct in Ellis' case warranted a significant penalty to deter those who might think the rewards outweighed the risks if caught.
"It is important that the deterrent effect of the penalty being imposed is not undermined by the ability of company directors and officers to insure against the financial cost of the penalty," Justice O'Bryan said.
In assessing BlueScope's penalty, Justice O'Bryan said the conduct "had the potential to occasion significant loss and damage to acquirers of flat steel products and associated economic harm to Australia."
Cartel conduct involves businesses agreeing to act together instead of competing with each other.
The Australian Competition and Consumer Commission brought the case against BlueScope and Mr Ellis in 2019 and welcomed the penalty.
"It is important that penalties are sufficiently large to deter even large companies and their employees from breaching Australia's competition laws," ACCC commissioner Liz Carver said.
"Cartel conduct is illegal because it cheats Australians by increasing the prices consumers and business customers have to pay, and by restricting healthy economic growth."
The ACCC submitted to the court that BlueScope be fined $83 million or $120 million, and Ellis pay between $600,000 and $800,000.
Meanwhile BlueScope had argued for a penalty of $30 million to 40 million, while Ellis submitted that $100,000 to $125,000 was appropriate.
While Justice O'Bryan found BlueScope did not deserve a discount on the basis of cooperation with the ACCC, he accepted that the company was committed to avoiding further contraventions of competition law.
Justice O'Bryan did not impose a disqualification order on Ellis - the ACCC wanted him banned from managing corporations for seven years - but did impose a non-indemnification order, meaning he could not pursue a claim or accept indemnity under any directors and officers insurance policy in order to pay his fine.
BlueScope and Ellis also have to pay the ACCC's costs.
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Natalie Croxon
Reporter at the Illawarra Mercury, mostly covering social affairs. Previously of the Bendigo Advertiser, Northern Daily Leader and Quirindi Advocate. Our Watch award winner.
Reporter at the Illawarra Mercury, mostly covering social affairs. Previously of the Bendigo Advertiser, Northern Daily Leader and Quirindi Advocate. Our Watch award winner.
