Australian Competition and Consumer Commission v BlueScope Steel Limited (No 5)

This proceeding was brought by the ACCC against BlueScope Steel Limited and Jason Ellis. The Court described the case as one about alleged attempts to induce certain suppliers of flat steel products in Australia to contravene the Competition and Consumer Act by arriving at understandings containing cartel provisions. The alleged cartel provisions were price-fixing provisions, meaning provisions said to have the purpose, effect or likely effect of fixing, controlling or maintaining the price of flat steel products supplied in Australia.

The commercial setting mattered. In the relevant period, BlueScope was the only Australian manufacturer of flat steel products, but imported products also competed in Australia through overseas steel mills, import traders and distributors. The Court's introduction says that by 2013 steel prices in Australia were low because of worldwide oversupply and lower demand after the global financial crisis. BlueScope and distributors were under financial pressure. According to the ACCC's case, Mr Ellis devised strategies intended to alleviate the consequences of that intense competition.

One alleged strategy was a benchmarking or recommended resale price strategy. The Court recorded the ACCC's allegation that BlueScope would publish a recommended resale price to be used by BlueScope, BlueScope's distributors and import traders as a benchmark for raising prices in Australia. Another alleged strategy concerned overseas steel manufacturers. The ACCC said BlueScope and Mr Ellis sought to restrict the volume of imported steel coming into Australia and persuade overseas steel manufacturers to increase the prices at which they sold flat steel products to Australian import traders.

The case was not about a completed cartel agreement. The Court expressly said the ACCC did not allege that the attempts were successful and that no understandings were ultimately arrived at. That is one of the most important practical features of the decision. The legal risk arose from the attempt to induce unlawful understandings, not from proof that a final arrangement was made and implemented.

The Court's introduction and catchwords show that this was not only a case about what was said in meetings and calls. It was also a case about who competed with whom in the supply of flat steel products. The Court identified two main functional levels of the market: manufacture or importation, and distribution. BlueScope operated at both levels. Other participants included import traders and distributors. Some distributors were described as BlueScope-aligned or franchised distributors, while others acquired steel predominantly from import traders.

That structure mattered because the cartel provisions depended on whether two or more of the parties to the alleged understanding were or were likely to be in competition with each other in relation to the supply of the relevant goods. The catchwords specifically identify disputes about market definition, the product and functional dimensions of the market, and whether overseas steel mills competed with the domestic producer. The respondents denied the ACCC's allegations and contested aspects of the market structure and the nature and extent of competition between BlueScope, distributors, overseas manufacturers and import traders.

The Court's introduction indicates that most of those market contentions were not accepted. O'Bryan J said that most of the contentions advanced on behalf of BlueScope and Mr Ellis concerning the market for flat steel products and BlueScope's competitors in Australia lacked substance. The judge noted that witnesses, including BlueScope's own employees, readily identified BlueScope's competitors and confirmed most of the ACCC's allegations concerning the structure of the market.

For businesses, this part of the case is a reminder that competition law risk is not confined to direct head-to-head rivals with identical business models. A supplier, importer, distributor or overseas manufacturer may still be treated as a competitor or likely competitor depending on the market and the goods in question. Businesses that operate at more than one level of a supply chain need to be especially careful, because they may have both vertical relationships and horizontal competition issues at the same time.

The legal issue was whether BlueScope and Mr Ellis attempted to induce certain suppliers of flat steel products to contravene s 44ZZRJ of the Competition and Consumer Act by arriving at understandings containing cartel provisions, within the meaning of s 76(1)(d). The alleged cartel provisions were said to be price-fixing provisions. The Court's catchwords and judgment structure show that several connected questions had to be resolved.

First, were the putative counterparties to the alleged understandings in competition or likely competition with each other at the relevant time? That required analysis of market definition and competition between BlueScope, distributors, import traders and overseas steel mills. Second, what does an "understanding" mean for the purposes of Part IV of the Act? The Court noted that an understanding is less formal than an arrangement, and the reasons were framed around alleged attempts to induce understandings rather than arrangements.

Third, what does "attempted to induce" mean in s 76(1)(d)? The catchwords show that the Court considered whether an attempt to induce an understanding requires one party to seek a commitment from the other, and the means by which an understanding may be reached. Fourth, what does it mean to be fixing, controlling or maintaining prices? The Court also considered attribution of conduct and intention to a body corporate under s 84(1).

In practical terms, the case asked whether BlueScope's conduct, including the recommended resale price strategy and the overseas mill strategy, crossed the line from aggressive commercial advocacy into an attempt to get other market participants to commit to or align with a price-related understanding that competition law prohibits.

O'Bryan J found the majority of the ACCC's allegations proved. In the introduction to the reasons, the Court stated that during the relevant period BlueScope and Mr Ellis attempted to induce certain suppliers of flat steel products in Australia, being seven Australian distributors, one import trader and one overseas steel manufacturer, to contravene s 44ZZRJ by arriving at an understanding that contained cartel provisions, within the meaning of s 76(1)(d) of the Act.

The Court also made clear what it was not deciding. The ACCC did not allege that the attempts were successful. No understandings were ultimately arrived at. The reasons say that in some instances BlueScope's proposal was rebuffed because counterparties believed the proposal would or might involve a contravention of the law. In other instances, the proposal was ignored because competitive pressure from imported steel made it commercially unviable. Even so, the Court held that the attempts themselves were enough for liability.

The orders show that this judgment was not the final remedies decision. The matter was listed for a later hearing on the question of remedies, including any applications for discovery on remedies, proposed orders and submissions. So while liability was determined in this judgment, penalties and other final relief were left for a later stage.

That procedural point matters for readers. If you are looking for the amount of any pecuniary penalty or the final form of relief, this judgment does not provide it. What it does provide is a clear liability finding that attempted inducement of cartel conduct can itself breach the Act.

This case is best read as a conduct warning for businesses under pricing pressure. The market conditions described by the Court are familiar across many sectors: oversupply, weak demand, low margins, aggressive imports and a desire to stabilise prices. In those conditions, businesses may be tempted to use language such as benchmarking, market discipline, recommended resale prices, holding the line or educating the market. The decision shows that labels do not control the legal analysis. What matters is the substance of the conduct and whether the business is trying to secure price alignment from competitors or likely competitors.

The Court's description of the alleged benchmarking strategy is especially important. A recommended resale price can sound like a softer, more ordinary commercial tool than an agreement. But where it is used as part of a strategy to get multiple competing suppliers to move together on price, the risk changes sharply. The same is true of discussions about import competition. If a business is trying to influence import volumes or persuade overseas suppliers to raise prices to local buyers as part of a broader market-wide pricing strategy, competition law issues can arise quickly.

For directors, founders, sales leaders and account managers, the practical lesson is to keep pricing decisions genuinely independent. Do not seek commitments from competitors or likely competitors about future prices. Do not use meetings, calls, conferences, spreadsheets or price lists to test support for coordinated price increases. Do not assume that a proposal is safe because it is framed as a recommendation or because the other side never agrees.

Businesses should also pay attention to internal governance. Staff need training on what they can and cannot discuss with competitors, importers, distributors and other market participants. Escalation procedures should be clear. If a conversation starts moving toward future pricing, common benchmarks or coordinated market responses, the safest course is to stop the discussion and obtain legal advice.

The judgment was delivered on 9 December 2022 by O'Bryan J in the Federal Court of Australia. The hearing dates listed in the judgment ran across August, September, October and November 2021. The orders made on 9 December 2022 listed the matter for a remedies hearing on 3 April 2023, with directions for discovery, proposed orders, submissions and any additional evidence relevant to remedies.

That means this decision should be understood as a liability judgment. It records the Court's findings on the ACCC's allegations and sets the matter down for the next stage dealing with remedies. Readers looking for penalties, declarations in final form, or disqualification outcomes should check the later remedies decision or orders.

This page gives a practical explanation of the liability judgment and the commercial conduct it addresses. It should not be treated as a substitute for legal advice on a specific pricing practice or communication.