Clifford Chance

Not enough dirty laundry: ACCC fails against Cussons

26 February 2018

On 22 December 2017, the Federal Court dismissed the proceedings by the Australian Competition & Consumer Commission (ACCC) against PZ Cussons Australia Pty Ltd (Cussons) for alleged cartel conduct also involving Unilever and Colgate in respect of the supply of laundry detergents.  The case demonstrates the difficulties the ACCC faces in proving the existence of a contract, arrangement or understanding amongst competitors based on circumstantial evidence.

This update examines the Court's approach the evidential burden required to establish understandings between competitors and the implications of this case in the context of the recently introduced prohibition against concerted practices.  In this regard, ACCC Chairman Rod Sims has commented that “[p]roving the existence of an understanding can be a complex task, which is why the Parliament recently added a new concerted practices prohibition to our competition law."

From a compliance perspective, the judgment provides practical pointers for suppliers and retailers on what they can, and can’t, do when meeting and communicating with industry bodies. 

On 20 February 2018, the ACCC announced it will appeal the decision to the Full Federal Court on the basis that the ACCC believes there was sufficient uncontested evidence for the Court to infer that Cussons had entered into an understanding.

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