The Federal Court has found BlueScope and former general manager of sales and marketing Jason Ellis engaged in attempted price fixing in the supply of flat steel products in Australia.
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The case was brought by the Australian Competition and Consumer Commission in 2019 and relates to when between September 2013 and June 2014, BlueScope and Mr Ellis attempted to have eight steel distributors set or raise the price for flat steel products.
The plan also involved Taiwanese steelmaker Yieh Phui.
Federal Court Justice Hugh O'Bryan found that Mr Ellis and BlueScope did attempt to fix the price of flat steel in Australia. A hearing on penalties is set for April next year, which could run into the millions.
The ACCC alleged that Mr Ellis came up with a strategy to benchmark and raise the price of flat steel products in September 2013, during a worldwide steel glut.
Mr Ellis attempted to set a recommended resale price to be used by BlueScope, distributors and import traders as a benchmark to raise their prices.
Mr Ellis also developed a strategy to limit overseas steel coming into Australia and persuade overseas steel manufacturers to increase the price at which they sold flat steel products to Australian import traders.
The ACCC said that this amounted to an attempt to control or maintain the price of flat steel products supplied in Australia.
This strategy fell afoul of the cartel provision in Australian competition law, which prohibits competitors from setting their prices, ACCC commissioner Liza Carver said.
"If successful, these attempts would have resulted in agreements between competitors which reduced price competition in the Australian flat steel market and increased prices for flat steel products which are widely used in Australia," she said.
The ACCC did not allege that these attempts at a cartel were successful and Justice O'Bryan found that no arrangements were arrived at and distributors did not agree to Mr Ellis's plan because they believed it would be illegal.
Justice O'Bryan found that current BlueScope CEO Mark Vassella was aware of the benchmarking strategy Mr Ellis has embarked on but did not find the evidence supported a finding that Mr Vassella was aware of price fixing.
In a statement to the Australian Stock Exchange, BlueScope said it was disappointed by the decision.
"BlueScope acknowledges the decision received today,' BlueScope chairman John Bevan said. "In the time since BlueScope first became aware of the conduct which led to the legal proceedings, BlueScope has implemented a number of steps to substantially strengthen its programs to enhance awareness of, and compliance with, competition law. The Company has also made improvements to our organisational structure, internal systems and processes, training for employees, and developed in-house advisory capabilities in competition law."
The parties will have two days to resolve penalties in April, and the ACCC is seeking an order to disqualify Mr Ellis from managing corporations.
In 2020, Mr Ellis was convicted and sentenced for attempting to have two BlueScope employees give false information to the ACCC. Mr Ellis was fined $10,000.
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