ACCC joins US, UK, Canada and NZ counterparts to probe global supply chains

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ACCC joins US, UK, Canada and NZ counterparts to probe global supply chains

The Australian Competition and Consumer Commission (ACCC) has joined its counterpart agencies in the United States, Canada, New Zealand and the United Kingdom to probe any potential anti-competitive conduct across global supply chains.

The ACCC, the US Department of Justice, Federal Bureau of Investigation, Canadian Competition Bureau, NZ Commerce Commission, and UK Competition and Markets Authority will come together as a working group to focus on illegal conduct, including collusion, amid pandemic related supply chain disruptions that have resulted in more expensive freight rates and consumer goods.

The IT industry has been one of the hardest hit by these supply chain disruptions, with COVID-19 restrictions pushing demand for hardware as remote working and digital transformation efforts took off.

Some items seeing demand surpassing supply include PC components - particularly processors - power management, display monitors, microcontrollers, among others.

“The global freight supply chain is a complex network involving many jurisdictions, so naturally detecting anti-competitive conduct requires strong international partnerships,” ACCC chair Rod Sims said.

“COVID-19 has caused the supply chain disruptions the world is currently experiencing, but the purpose of this working group is to detect any attempts by businesses to use these conditions as a cover to work together and fix prices.”

Sims added the agencies will share intelligence to identify any behaviour that restricts or distorts competition, and that companies are now on notice that the agencies will be ready to act.

The ACCC said increased demand for containerised cargo and heavy congestion across the global supply chain have caused disruptions and delays to most parts of the economy, with freight rates on key global trade routes now seven times higher than two years ago.

“Australia is an open, trade-exposed economy, and like the other international agencies in this working group, we have a very strong interest in preserving strong competitive markets for global trade,” Sims said.

The agency said types of anti-competitive conduct that will be watched out for include cartels and any other activities that materially impact competition, such as exclusionary arrangements by firms with market power.

New Zealand's Commerce Commission also released a separate statement, with chair Anna Rawlings saying:

“We have zero-tolerance for unscrupulous businesses using Covid as an opportunity for cartel conduct, such as non-essential collusion between competitors or anti-competitive behaviour. The international working group will strengthen our continued efforts to deter and penalise cartel conduct,” she said.

“In addition to the work we are doing as part of the international working group, we have undertaken a range of educational initiatives to increase businesses’ understanding of cartel conduct and its consequences,” she added. “In addition to financial penalties, since April 2021, individuals involved in cartel conduct can be liable for a term of imprisonment of up to 7 years so it is more important than ever that businesses, their directors and employees make sure they understand how to stay on the right side of the law.”

CRN NZ is set to launch in the coming weeks. Contact NZ bureau chief Ben Moore for more information. 

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