In December 2020, Jason Ellis, a former general manager of sales and marketing at BlueScope Steel Limited ("BlueScope"), was sentenced to eight months' imprisonment (suspended) and ordered to pay a A$10,000 fine, for inciting the obstruction of an investigation by the Australian Competition and Consumer Commission ("ACCC") into alleged price fixing by BlueScope and Mr Ellis.
This was the first time an individual had been charged with, and convicted of, inciting the obstruction of an ACCC investigation.
| what you need to know - key takeways |
- Inciting the obstruction of a Commonwealth official in the performance of their functions is a criminal offence under the Commonwealth Criminal Code, and carries a maximum jail sentence of two years. On a guilty plea in the Local Court, the maximum jail sentence is one year.
- The ACCC takes attempts to prevent it from obtaining full and truthful accounts of conduct under investigation extremely seriously, and can refer conduct (including failure to comply with compulsory notices and providing false information) to the Commonwealth Director of Public Prosecutions ("CDPP") to consider prosecution.
- The ACCC's civil proceedings against BlueScope and Mr Ellis for alleged price fixing continue, with the trial scheduled to commence in August 2021.
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Background and summary
In October 2019, Mr Ellis was charged by the CDPP with two counts of inciting the obstruction of a Commonwealth official in the performance of their functions. The charges related to actions Mr Ellis took during an ACCC investigation into alleged cartel conduct by BlueScope and Mr Ellis.
The ACCC was investigating allegations that, between September 2013 and June 2014, BlueScope and Mr Ellis attempted to induce various steel distributors in Australia and overseas manufacturers to enter arrangements containing a price-fixing provision. The ACCC commenced civil proceedings against BlueScope and Mr Ellis in respect of those allegations in August 2019.
In September 2020, Mr Ellis entered a guilty plea to one "rolled-up" charge, for inciting two fellow BlueScope employees to give false evidence to the ACCC during its investigation, regarding discussions he and those employees had in meetings with certain steel companies.
In handing down the sentence, Magistrate Atkinson considered the conduct to be objectively serious, and said: "in all dealings [with the ACCC] a person needs to allow investigations to run properly, without any attempt to hinder investigations by officials".
The ACCC's investigative powers, including its information-gathering powers under section 155 of the Competition and Consumer Act 2010 (Cth), are central to its ability to detect and gather evidence of cartels. Refusing or failing to comply with a section 155 notice by the due date is also a criminal offence, as is providing false or misleading information or evidence in response to a notice. These offences can also attract financial penalties and/or imprisonment.
Comment
The case demonstrates the seriousness with which the ACCC takes attempts to obstruct it from obtaining a full and truthful account of matters under investigation.
It also illustrates that such conduct may increase the potential legal liability of parties under investigation, exposing them not only to potential liability for the conduct under investigation but also prosecution for the subsequent obstructive conduct.
The ACCC's Chairman, Rod Sims, has indicated that the ACCC will not hesitate to make similar referrals to the CDPP in the future, where the ACCC considers parties have improperly sought to impede its investigations.
The proceedings against BlueScope and Mr Ellis for alleged cartel conduct remain ongoing, with a trial scheduled to commence in the Federal Court in August 2021.
