The competition regulator has dropped explosive claims of price fixing over vehicle imports at the nation’s ports and agreed to settle a court case for a $3.8 million fine and an admission that Patrick Stevedores and P&O Australia entered into a 2001 deal that was “likely” to lessen competition.

Legal action against former Patrick boss Chris Corrigan and other Patrick and P&O executives will also be dropped if the Federal Court approves the settlement, outlined to judge Peter Jacobsen.

The Australian Competition and Consumer Commission launched legal action in August 2007, making a raft of allegations against a number of former Patrick companies, now owned by Toll and Asciano, and P&O Ports, now owned by DP World.

The regulator said the Patrick companies and P&O had unlawfully colluded in 2001 when they made an agreement to share their Sydney, Melbourne and Brisbane motor vehicle wharf facilities, through which 85% of vehicles are delivered into Australia.

The two companies set up a joint venture, Australian Amalgamated Terminals, to establish the terminals.

About 70% of the $25 billion worth of motor vehicles sold in Australia each year are imported.

Corrigan, Donald Smithwick and former P&O executives Andrew Burgess and Timothy Blood were also named in the suit, and faced fines of $500,000 for each contravention of the Trade Practices Act.

After the case was launched, Corrigan hit out at the ACCC, saying its claims of price fixing were “outrageously reprehensible”, and that the ACCC was aware of the agreement between Patrick and P&O.

The parties were due to begin a lengthy hearing in October but instead have told Justice Jacobsen they had agreed on a “statement of facts”, and asked the court to make orders that would see Asciano and DP World each pay $1.9m to the regulator.

In exchange for the fine and the admission “for the purpose of these proceedings only” that “the conduct they respectively engaged in during the relevant period … had the likely effect of substantially lessening competition … in the three ports”, the ACCC will drop all the remaining claims, including that the deal did, in fact, lessen competition in the market.

The submissions are a long way from the injunctions, declaration, penalties and orders sought by the ACCC.

The eight related companies named in the suit will also pay $200,000 between them.

Each company faced a $10m fine for each contravention of the Act but yesterday the judge was told there was “no flagrant or wilful contravention of the Act by Patrick, P&O or any related body corporate” and no “punitive” element was needed in the fine.

The parties avoided a lengthy and costly case by agreeing to settle, and the conduct was “not clandestine”, the court heard.

Source: Autofile