Australian Competition and Consumer Commission v Qteq Pty Ltd (Penalty) [2026] FCA 356

This Federal Court decision is a penalty judgment in cartel proceedings brought by the ACCC against Qteq Pty Ltd and Simon Ashton. The Court had already delivered a liability judgment on 17 April 2025. In that earlier decision, Bromwich J found that five out of six alleged attempts had been proved. Qteq was found to have attempted to enter into contracts, arrangements or understandings with a competitor or likely competitor containing cartel provisions, and Mr Ashton was found to have attempted to induce those contraventions.

The commercial setting was the coal seam gas industry. Qteq supplied gauge works to well operators, including permanent downhole gauges and related services. The Court said Qteq was the incumbent supplier of gauge works to QGC, a Shell joint venture business, and that this work accounted for the majority of Qteq's revenue. A tender process for replacement work therefore had obvious commercial significance for Qteq.

The ACCC's case, as summarised in the penalty judgment, was that Qteq adopted a strategy to neutralise competitive threats posed by the tender process and its outcome by attempting to collude with current or prospective competitors. The alleged attempts were characterised as involving customer allocation, structuring tender bids, market sharing and non-compete agreements. Three attempts involved Pro-Test, two involved Easternwell and one involved Firetail.

The Court said the Firetail allegation was not made out because the ACCC could not establish the competition condition between Firetail and Qteq. But five attempts were proved. This 2026 judgment did not re-run the liability case in full. Instead, it focused on what penalties and related orders should be imposed after those findings.

The available reasons give the clearest detail about the Pro-Test dealings. At a dinner at Kingsley's restaurant in Brisbane on 26 October 2017, Mr Ashton proposed that Pro-Test should not bid for the QGC gauge tender and, in exchange, Qteq would not compete for work from Santos, one of Pro-Test's customers. The Court accepted that the dinner had legitimate purposes as well, including discussion of a possible sale of a new automatic diverter valve system and possible supply of GeoPSI gauges. But those legitimate topics did not prevent the Court from finding an attempted contravention.

The Court then described a later change in approach. Instead of proposing that Pro-Test stay out of the QGC gauge tender entirely, Qteq proposed that Pro-Test should bid for only around 15% of the work. The Court said Qteq sought to engineer that result by offering GeoPSI gauges to Pro-Test under a pricing structure that would make a 15% bid economical, but no more than that, while Qteq would not compete for Santos work.

The judgment also describes a 2019 proposal made by Mr Ashton to a founding director of Pro-Test at a dinner at the Fantauzzo Hotel in Brisbane. The proposal was that Pro-Test would not supply gauge works and Qteq would not supply completions or drill stem testing. The Court treated that as an attempted market sharing understanding.

For Easternwell, the available text explains the commercial context. The QGC tender contemplated that the successful gauge contractor would train the successful rig contractor to perform certain gauge installations over time. Easternwell was the incumbent rig contractor. Qteq was concerned that by providing training and knowhow it would create a viable competitor in gauge works. In that setting, Qteq sent a draft agreement containing a non-compete clause aimed at preventing Easternwell, other than in concert with Qteq, from providing or pursuing gauge installation services in competition with Qteq. The available text cuts off before the full summary of the Court's findings on this part of the case is reproduced.

The main issue in this judgment was penalty, not liability. The Court had already found five attempted contraventions by Qteq and five attempted inducements by Mr Ashton. The question in the 2026 decision was what pecuniary penalties and ancillary orders should now be imposed under the Competition and Consumer Act 2010 (Cth).

The catchwords and reasons show that the Court had to deal with several penalty questions. These included the primary object of deterrence, whether some contraventions should be treated as a single course of conduct, whether particular circumstances amounted to extra-curial punishment or detriment, and whether a non-indemnification order should be made against Mr Ashton. The Court also had to consider the significance of a later asset sale under which Qteq sold its assets and business after the liability judgment and after the penalty hearing.

The Court recorded that the parties were far apart on penalty. The ACCC sought an overall penalty of between $11 million and $13 million against Qteq, while Qteq argued for $1.5 million. For Mr Ashton, the ACCC sought between $750,000 and $950,000, while he argued for $500,000. The respondents did not dispute that pecuniary penalties were necessary and appropriate if the liability findings stood, although a liability appeal had been foreshadowed.

The Court also noted the maximum aggregate penalties available at the time of the conduct: $50 million for Qteq, being $10 million per attempted contravention, and $2.5 million for Mr Ashton, being $500,000 per attempted inducement. The judgment further notes that maximum penalties for this kind of conduct have since been substantially increased.

Bromwich J imposed total pecuniary penalties of $5,000,000 on Qteq and $1,000,000 on Mr Ashton. The orders required payment within 60 days. The Court also ordered that Mr Ashton must not pursue any claim or accept any indemnity under any applicable insurance policy, including the management liability insurance policy identified in the orders, for payment or reimbursement of any part of his pecuniary penalty.

The respondents were also ordered to pay the ACCC's costs of and incidental to the proceeding, excluding costs in relation to specified parts of the further amended originating application and a discontinued claim. The judgment's catchwords and introductory reasons make clear that deterrence was central to the Court's approach.

An important feature of the decision is that the Court still imposed substantial penalties after Qteq had sold its assets and business. The respondents notified the ACCC on 29 January 2026 that, under an asset sale agreement, Qteq had sold its assets and business to a third party with effect from 31 December 2025. The Court delayed delivery of judgment to allow further evidence and submissions about that development and its relevance to penalty. In the meantime, undertakings were given that sale proceeds held in trust would not be dealt with until 30 days after delivery of judgment.

Even with that later business sale, the Court imposed the penalties set out above. The reasons therefore support a practical reading that a later divestment, restructuring or effective exit from business does not necessarily remove the need for a penalty that serves deterrence.

The non-indemnification order is also notable. The Court did not simply penalise Mr Ashton personally. It also prevented him from shifting the burden of that penalty to insurance. For directors and senior executives, that is a significant part of the outcome. It shows that personal exposure in competition matters may involve both the penalty itself and restrictions on reimbursement.

Because the available text is truncated, this page does not attempt to reconstruct every step of the Court's detailed penalty reasoning. But the orders and the introductory reasons clearly establish the result and the main considerations that shaped it.

The practical significance of this case goes well beyond the coal seam gas sector. The conduct described by the Court sits in familiar business situations: a major customer tender, concern about losing incumbent work, discussions with rivals about supply arrangements, and draft documents used to manage commercial relationships. The legal risk arose because the proposals described in the judgment were directed at reducing rivalry between competitors or likely competitors.

That matters because many businesses still associate cartel law only with obvious price-fixing or secret meetings between large corporations. This case shows a broader and more realistic risk profile. A proposal that a rival should not bid, should bid for only part of the work, should stay out of a service line, or should accept a non-compete restriction linked to training or supply can create serious exposure.

The case also underlines that attempted conduct can be enough. The Court's orders were not limited to a completed arrangement. So a business should not assume it is safe because the other side rejected the proposal, negotiations broke down, or no final document was signed. The judgment refers to dinners, conversations, communications, texts and draft agreements as part of the conduct considered.

Another point is personal exposure. The Court imposed a separate penalty on Mr Ashton and made a non-indemnification order against him. Senior decision-makers should read that as a reminder that competition law risk is not confined to the company. Where an executive is directly involved in competitor approaches or tender-related proposals, personal consequences may follow.

The judgment also shows that later business changes may not solve an existing penalty problem. Qteq had sold its assets and business after the penalty hearing, yet the Court still imposed substantial penalties. Businesses should therefore be cautious about assuming that a sale, restructure or winding down of operations will remove exposure created by earlier conduct.

Finally, the Easternwell part of the case is a useful reminder that competition issues can arise in documents that are not obviously labelled as cartel arrangements. A confidentiality deed, non-disclosure agreement, training arrangement or non-compete clause may still attract scrutiny if it is directed at preventing a competitor or likely competitor from competing independently.

The Court's summary of the proven conduct is useful because it shows the range of material that can matter in a competition case. The conduct was not confined to a formal signed contract. It included oral statements at dinners, direct conversations between principals, communications through subordinates, a text message sent the next morning, and draft legal documents prepared by in-house lawyers.

That is important for businesses because risk often develops incrementally. A discussion may begin with a legitimate topic such as supply, technology, training or a possible commercial partnership. But if the conversation shifts into who should bid, how much work each side should seek, which customers each side should leave alone, or whether one side should be prevented from competing, the legal character of the exchange can change quickly.

The penalty judgment was delivered on 26 March 2026 by Bromwich J in the Federal Court of Australia. The liability judgment referred to in the reasons was delivered on 17 April 2025. The penalty hearing took place on 27 October 2025. After that hearing, the respondents notified the ACCC on 29 January 2026 that Qteq had sold its assets and business to a third party with effect from 31 December 2025. The Court then received supplementary evidence and submissions, with the last of that material filed on 13 March 2026.

This page is suitable for publication with a cautionary note. The available text is truncated, so some details of the Easternwell allegations and some of the Court's full penalty reasoning are not reproduced here. The page therefore focuses on what the judgment clearly establishes and avoids filling gaps with unsupported detail.