ACR-News
26 April 2010

Air conditioning cartel firms pay £5.5 million

A LONG-RUNNING cartel case which involved price fixing air conditioning projects has resulted in firms being ordered to pay a total of £5.5 million ($9.2 million AUD).
The cartel engaged in bid-rigging and price-fixing in Australia affected the supply and installation of commercial and industrial air conditioning. The cartel's activities impacted ac projects valued at £77 million ($129 million AUD).

The Australian Competition Consumer Commission (ACCC) began proceedings in 2004 against 17 companies and 22 individuals. In its case, the ACCA alleged that from 1997 to June 2003 some of the firms, who were members of the Air Conditioning and Mechanical Contractors' Association of Western Australia, attended weekly meetings at AMCA premises to discuss upcoming tenders and agree which would be designated to submit the lowest price.

Penalties totalling $9,272,000 (AUD) were imposed on the firms by the Federal court in Perth who handed down its final orders in the case. The size of the penalties made it the largest trade practices case ever run in Western Australia.

'The ACCC is pleased these proceedings have been concluded,' stated ACCC chairman Graeme Samuel on April 21.

He added: 'This is a timely reminder to businesses who may be tempted to engage in illegal cartel conduct that the ACCC will not hesitate to investigate and prosecute those involved in such conduct. Furthermore, given recent amendments to the law, individuals who are involved in serious cartel conduct of the type subject to these proceedings now face the prospect of criminal prosecution and the risk of imprisonment for up to 10 years.'

The ACCC began proceedings in 2004 against the following firms:

ADMIRAL MECHANICAL SERVICES PTY LTD
AMEC AUSTRALIA PTY LTD
AMEC ENGINEERING PTY LTD
BUILDING SERVICES PTY LTD
CENTIGRADE WA PTY LTD
CMS ENGINEERING PTY LTD
DIRECT ENGINEERING SERVICES PTY LTD
ENVAR ENGINEERS AND CONTRACTORS PTY LTD
HADEN ENGINEERING PTY LTD
HVAC CONSTRUCTION PTY LTD
JAKO INDUSTRIES PTY LTD
LL NOMINEES PTY LTD
MECHANICAL PROJECT MANAGEMENT PTY LTD
NORFOLK GROUP HOLDINGS PTY LTD
RALIE PTY LTD
SCOTT MECHANICAL SERVICES PTY LTD
TYCO AUSTRALIA PTY LTD

Proceedings against the Norfolk Holdings Group Pty were discontinued.

The ACCC became aware of the cartel after a trade practice law compliance review of Tyco and its subsidiaries, following its involvement in a Queensland fire protection price-fixing case. Three Tyco companies entered into leniency agreements with the ACCC, other respondents entered into cooperation agreements with the ACCC.

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