On 13 February 2019 the Federal Court ordered Cryosite Limited to pay $1.05 million in penalties for engaging in ‘gun jumping’ cartel conduct in its asset sale agreement with Cell Care Australia. The modest fine reflected the (relatively small) scale of the business concerned and their cooperation with the ACCC’s investigation. The maximum penalty is up to 10% of annual turnover. We would expect very substantial penalties in the event large firms engaged in similar practices.

‘Gun jumping’ occurs when the merger or acquisition parties combine or coordinate their conduct prior to completion of the transaction and in particular prior to obtaining merger control clearance from the relevant competition authorities. Such behaviour may amount to a cartel (or, following its introduction in November 2017, a concerted practice) which is prohibited under the Competition and Consumer Act 2010 (Cth) (CCA). The Australian Competition and Consumer Commission (ACCC) conducts market monitoring to detect mergers and acquisitions and will take action if it has competition concerns.

Read the full briefing here.

Contacts

Liza Carver
Liza Carver
Regional Head of Practice, Australia
+61 2 9225 5574
Patrick Gay
Patrick Gay
Partner, Sydney
+61 2 9322 4378
Matthew Bull
Matthew Bull
Partner, Melbourne
+61 3 9288 1582
Annalisa Heger
Annalisa Heger
Special Counsel, Melbourne
+61 3 9288 1523