The highest ever penalty handed out for breaching competition rules has been handed to a foreign company, with the $46 million bill a substantial increase on the original penalty after an appeal by the ACCC.
Japanese firm Yazaki Corporation had been found guilty in 2015 of anti-competitive cartel conduct in relation to the supply of wire harnesses used in the making of the Toyota Camry.
In May 2017, Yazaki was ordered to pay penalties worth $9.5 million. However the ACCC appealed this penalty, suggesting that a fine of between $42 million and $55 million was more appropriate “to reflect both the size of Yazaki’s operations and the very serious nature of its collusive conduct.”
Yazaki also appealed the verdict and its conviction.
Yet this week the Full Federal Court sided with the ACCC, and increased the initial penalty almost five-fold to $46 million.
“The ACCC welcomes the $46 million in penalties ordered against Yazaki, which is the highest penalty amount ever imposed under the Competition and Consumer Act 2010,” ACCC Chairman Rod Sims said.
“We appealed the penalties imposed by the trial judge because we considered that the original penalties of $9.5 million were insufficient to adequately deter Yazaki or other businesses from engaging in cartel conduct in the future.”
Mr Sims claimed that cartel conduct is destructive to healthy economic growth, in addition to the direct impacts it has on consumers and other businesses.
“For this reason, it is of considerable importance that penalties imposed by the Courts are large enough to act as a sufficient deterrent to prevent companies and their employees contravening Australia’s competition laws,” he said.
“The ACCC is continuing to seek penalties which are high enough to deter anti-competitive conduct, particularly by large national and multinational corporations.”
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.