The Australian Conversion: How the Case for Cartel Criminalisation Was Made

Abstract

The phenomenon of cartel criminalisation provides a window on dynamics in society at large. In particular, it exemplifies the political risk that governments face in wrestling with conflicting economic and social imperatives. This article uses the experience in Australia to demonstrate how the political risk inherent in cartel criminalisation may be overcome. Alive to public ambivalence over neoliberal market-based reforms, the Australian competition authority and government downplayed the economic rationale for cartel criminalisation and capitalised instead on the public's need for certainty and security in the social order. This was done by playing up the role of the government as protector of the economy, exploiting public scepticism towards globalisation and distrust of big business and invoking populist egalitarian sentiment. The strategy has been effective in the short term. However, challenges still loom in the enforcement of the cartel regime that may yet expose the fallacies in the case that was made for criminalisation.

The Criminal Enforcement of Antitrust Law – The Importance of Building an Enforcement Culture and How to Create it

“…A 2003 study showed that 81 percent of respondents agreed with the statement 'when big businesses break the law they often go unpunished'. 159 40 percent strongly agreed. Evidence also revealed that Australians perceived the criminal justice system as too lenient, with recent surveys evincing a consensus about the proposition that there should be 'stiffer sentences' for those who 'break the law'.…”

“…This is despite the fact that cartel criminalisation represents a categorical shift in economic policymaking, ie 'behaviour seen to damage the economy is now not merely illegal, but criminal'. 122 Indeed, the credibility of this view has been strengthened because of the global financial crisis, with families in some jurisdictions having to decide between buying food and paying their mortgage, 123 or incurring food poverty in general.…”

“…126 The inequality gap has also been somewhat reduced, with benefits flowing to both high and low income earners. 127 Social attitude surveys reveal public support for these reforms, with Australians also viewing international trade as conducive to providing better consumer products. 128 They also understand that living standards depend on a growing economy: they see the value in 'maintaining "a high level of economic growth", and are proud of Australia's economic achievements'.…”

“…'There was confidence, however, that laypeople would understand a simplified message about the effects of such conduct on them as consumers, namely, that cartels raised prices'. 136 Indeed, consumers may not understand the technicalities of a cartel, but in the wake of the financial crisis and the ensuing proliferation of household debt, 137 they will be more attuned to understanding when they have been ripped off. 138 One Parliamentary member illustrates this point by detailing her experience in dealing with members of the public: 'Nothing irritates Australian consumers more than paying too much for goods and services that are offered in the market place.…”

The war on cartels and the social meaning of deterrence

“…Samuel and the ACCC backed up their campaign for criminalization with moral arguments equating cartel conduct to theft or fraud, but all attempts at substantive moral justification for the criminalization of cartel conduct have been ambiguous, controversial, and, ultimately, unsuccessful at swaying public and policy opinion (see Stucke ; Beaton‐Wells & Haines , ; Williams ; Haines & Beaton‐Wells ). It is the argument for criminalization on the basis of deterrence, rather than other arguments for criminalization, that has gained traction.…”