Successful prosecution of criminal cartel leads to substantial fines
In 2019, two Sydney skip bin and waste processing businesses, Bingo Industries and Aussie Skips Bin Services and Aussie Skips Recycling (Aussie Skips) and their respective CEOs, Daniel Tartak and Emmanuel Roussakis, engaged in cartel conduct by agreeing to set higher prices for their building and demolition waste services.
In February 2024, following a prosecution by the Commonwealth Director of Public Prosecutions, each entity and individual were convicted in the Federal Court of cartel offences contrary to sections 45AF and 45AG of the Competition and Consumer Act. The CEOs were each sentenced to an intensive correction order, a substantial fine and were disqualified from managing corporations for 5 years. Each company was fined, with Bingo receiving a fine of $30 million, the second largest fine imposed in Australia for criminal cartel conduct. The largest fine ever of $34.5 million was imposed on K-Line in 2019 in another criminal cartel prosecution.
The matter
Between May and August 2019, Mr Tartak and Mr Roussakis entered into, and gave effect to, a cartel agreement on behalf of their respective businesses. Bingo was the largest provider of collection and processing services for demolition waste in Sydney. Aussie Skips was the second largest provider of collection services and a small provider of processing services.
The offending consisted of making and giving effect to, an agreement between the two companies to increase their prices for those services by between 20 and 25 per cent.
The Australian Competition and Consumer Commission (ACCC) investigated these breaches from June 2019, following a complaint about prices, and subsequently referred the matter to the CDPP for prosecution.
Cartel behaviour distorts competition in the supply of goods and services in a market. As the sentencing judge, Justice Wigney, stated cartel conduct “harms consumers, businesses, and the economy, and is likely to increase prices, reduce choice and distort innovation processes”.
Criminal penalties for cartel conduct were first introduced in the Competition and Consumer Act in 2010. The ACCC is responsible for investigating criminal cartel conduct and, where appropriate, referring a brief of evidence to the CDPP for prosecution.
In August 2022, Bingo pleaded guilty to 2 criminal cartel offences while Mr Tartak pleaded guilty to similar charges in October 2022. This was followed by Aussie Skips and Mr Roussakis entering their guilty pleas in February 2023.
Sentencing
In February 2024, all offenders were convicted and sentenced.
The Federal Court sentenced Bingo to a fine of $15 million per contravention ($30 million in total) and Aussie Skips to a fine of $1.75 million per contravention ($3.5 million in total).
Mr Tartak was sentenced to an intensive corrections order of 2 years, requiring him to participate in 400 hours of community service. He was also fined $100,000 and disqualified from managing corporations for 5 years.
Mr Roussakis was sentenced to an intensive corrections order of 18 months, requiring him to participate in 300 hours of community service. He was also fined $75,000 and disqualified from managing corporations for 5 years.
In sentencing the offenders, Justice Wigney found there could be little doubt these were very serious offences which warranted condign punishment.
Justice Wigney found that while the exact impact of these arrangements could not be quantified, the cartel “undoubtedly suppressed and distorted price competition in the important markets for waste collections and processing services in Sydney” to the detriment of consumers of those services and to the benefit of Bingo and Aussie Skips.
The Court commented that general deterrence is a particularly significant consideration in cartel cases because of the difficulty of detecting cartels and the imperative that any penalty imposed “not be regarded as an acceptable cost of doing business”.
In March 2024, Aussie Skips and Mr Roussakis sought leave to appeal their sentences however on 5 September 2024, those appeals were withdrawn, drawing this matter to a conclusion.
Related material
ACCC website about cartels
ACCC’s anonymous cartel portal.