Source: Australian Ministers for Regional Development
The ACCC has commenced civil cartel proceedings in the Federal Court against four mobile crane hire companies – Borger Crane Hire & Rigging Services Pty Ltd, MCR Melrose Pty Ltd, Two Way Cranes Pty Ltd and Ultra-Lift Cranes Pty Ltd – and four senior executives, for allegedly arranging not to supply services to certain customers or sites. Two of the companies also allegedly attempted to fix prices.
The ACCC alleges the four Sydney-based companies breached Australia’s cartel laws and likely impacted customers and sites, including major construction sites, on a number of occasions between 2020 and 2024.
“The allegations in this case involve the conduct of the largest mobile crane companies in Sydney that regularly supply mobile cranes for major infrastructure projects, small business and residential building work,” ACCC Chair Gina Cass-Gottlieb said.
“When companies collude to limit supply or fix prices, it reduces competition in the market and harms businesses and consumers.”
The ACCC alleges the four companies used WhatsApp to identify certain building sites or customers and make arrangements between themselves that some or all of these companies would not supply cranes to these sites or customers.
Borger Cranes’ General Manager Shawn Borger, Melrose Cranes’ former Managing Director Gregg Melrose and former General Manager Ryan Melrose, and the Managing Director of both Two Way Cranes and Ultra-Lift Cranes Frank Zammit are alleged to be involved in this conduct.
It is alleged that the senior executives coordinated their actions using WhatsApp chat groups named the “Crane Companies” and “Big 3”.
The ACCC alleges that Melrose Cranes and Gregg Melrose made three attempts in 2022 to fix mobile crane hire rates with competing crane companies.
It is also alleged that in 2022 Borger Cranes and Shawn Borger attempted to fix cross-hire rates, which are the rates that apply when a mobile crane company rents a crane from a competitor crane company.
“Mobile cranes are used across a range of critical sectors of the Australian economy, including construction, infrastructure, utilities, and mining, so ensuring businesses compete vigorously to supply services into these sectors is extremely important,” Ms Cass-Gottlieb said.
“We will continue to hold companies and individuals accountable for conduct that we consider harms competition and, ultimately, the broader community.”
The ACCC is seeking declarations, pecuniary penalties and costs against the businesses and the four senior executives, disqualification orders against three of the senior executives, and compliance orders against Borger Cranes, Two Way Cranes and Ultra-Lift Cranes.
Background
Mobile cranes are self-powered cranes that can move on their own. They include wheeled or truck-mounted cranes that can drive on roads. They come in various sizes and lifting capacities.
The alleged conduct would have impacted building and infrastructure projects across the Sydney area from 2020 to 2024. Mobile crane hire is important to the Australian economy, including in construction (from large scale government-funded construction projects to small scale residential projects), infrastructure, utilities, and mining.
Some of the alleged conduct arose in the context of ongoing negotiations between the mobile crane hire companies and the CFMEU regarding new Enterprise Bargaining Agreements. Certain alleged arrangements were entered into in circumstances where mobile crane companies had been, or were at risk of being, removed from sites due to the CFMEU. Other alleged arrangements were entered into in circumstances where the affected customers were identified as having unpaid debts for mobile crane hire services.
Note to editors
A cartel exists when businesses agree to act together instead of competing with each other. Cartel conduct can include price fixing, sharing markets, rigging bids and controlling output (limiting the amount or type of goods and services available).
More information about cartel conduct can be found on the ACCC’s website.
Anyone who thinks they may have been involved in cartel conduct is urged to call the ACCC Cartel Immunity Hotline on (02) 9230 3894. More information about the immunity process is available on the ACCC’s website. People can also report alleged cartel conduct by using the anonymous cartel portal.
Public procurement officials who want to know more about detecting cartels are encouraged to contact the ACCC Cartel Outreach team at carteloutreach@accc.gov.au.
The ACCC investigates cartel conduct and can take civil cartel proceedings in the Federal Court or refer serious cartel conduct to the Commonwealth Director of Public Prosecutions.
For corporations, the maximum civil penalty which may be ordered by a Court for cartel conduct which occurred before 9 November 2022 is the greater of:
- $10 million,
- if the Court can determine the value of the benefits reasonably attributable to the act or omission – three times that value, or
- if the Court cannot determine the value of the benefits reasonably attributable to the act or omission – 10 per cent of the corporation’s annual turnover in the 12 months preceding the act or omission.
An individual found to have been involved in civil cartel conduct before 9 November 2022 is subject to a maximum penalty of $500,000 for each act or omission.
The maximum civil penalties for cartel conduct by corporations and individuals were substantially increased with effect from 9 November 2022. The maximum penalty for individuals after 9 November 2022 is $2.5 million for each act or omission. For corporations, the maximum penalty after 9 November 2022 is the greater of:
- $50 million,
- if the Court can determine the value of the benefits reasonably attributable to the act or omission – three times that value, or
- if the court cannot determine the value of the benefits reasonably attributable to the act or omission – 30% of the company’s adjusted turnover during the breach turnover period.