Penalties of $500,000 were today imposed on Visy Paper Pty Ltd and penalties of $25,000 on two senior executives for trying to stop a competitor, Northern Pacific Paper, from taking Visy's customers.
The Federal Court also ordered declarations and injunctions restraining Visy and the executives from engaging in similar conduct in future and ordered a trade practices compliance program.
The penalties follow the High Court's finding in October 2003 that Visy attempted to contravene section 45 of the Trade Practices Act 1974 which deals with anti-competitive conduct. The proceedings were instituted by the Australian Competition and Consumer Commission in December 1998.
In handing down his judgment, Justice Ronald Sackville, said:
"In my view, Visy's conduct warrants the imposition of a substantial pecuniary penalty … The penalty must be sufficient to act as a deterrent to Visy and as a general deterrent to those corporations or individuals contemplating engaging in anti-competitive conduct in contravention of the TP Act".
"The non-competition clause plainly would have had an anti-competitive effect on the market".
"While Visy had a compliance regime in place when the contraventions took place, it appears not to have been particularly intensive or effective".
ACCC Chairman, Mr Graeme Samuel, said the penalties demonstrated the Federal Court's low tolerance for any attempts at boycott activity.
"Whenever boycotts appear on the ACCC radar, we are committed to stamping them out", he said. "Such conduct is often difficult to detect, so when companies are caught a heavy penalty is fitting.
"Today's penalty should tell companies to resist the temptation to collude with competitors or risk a significant price. That price is not only monetary but also to the reputation of the company and the individuals concerned.
"The decision reinforces the need for business to have an effective trade practices education program to remove the risk of transgressions of the law".