¹ Competition and Consumer Act 2010 (Cth) pt IV div 1 and s 45(2) (previously Trade Practices Act 1974 (Cth)). Provisions prohibiting cartels were also found in previous Commonwealth laws that encountered constitutional difficulties. The Australian Industries Preservation Act 1906 (Cth) was struck down in Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330, while the Trade Practices Act 1965 (Cth) was read down in Strickland v Rocla Concrete Pipes Pty Ltd (1971) 124 CLR 468 and subsequently repealed.

² Competition and Consumer Act 2010 (Cth) ss 44ZZRF–44ZZRG.

³ ACCC, Cartels <http://www.accc.gov.au/business/anti-competitive-behaviour/cartels>. For instance, the ACCC states that cartels decrease ‘infrastructure by rigging bids in public infrastructure projects which inflates costs and ultimately reduces the public sector capacity to invest in beneficial projects’.

⁴ European Commission, Cartels: Overview (16 August 2013) <http://ec.europa.eu/competition/cartels/overview/index_en.html>.

⁵ US DOJ, Mission (20 July 2015) <http://www.justice.gov/atr/about/mission.html>.

⁶ ACCC, above n 3.

⁷ 405 US 233 (1972).

⁸ 15 USC §§ 1–7 (1890).

⁹ 15 USC §§ 41–58 (1914).

¹⁰ Ibid.

¹¹ Federal Trade Commission v Sperry & Hutchinson Co 405 US 233, 241 (1972).

¹² US DOJ, above n 5.

¹³ The Enterprise Act 2002 (UK) c 40, s 188(1) used to include the dishonesty requirement. This requirement was removed by the Enterprise and Regulatory Reform Act 2013 (UK) c 24, s 47, which entered into force in April 2014. See Whelan, Peter, ‘Section 47 of the Enterprise and Regulatory Reform Act 2013: A Flawed Reform of the UK Cartel Offence’ (2015) 78 Modern Law Review 493.CrossRefGoogle Scholar

¹⁴ Beaton-Wells, Caron et al, ‘The Cartel Project: Report on a Survey of the Australian Public Regarding Anti-Cartel Law and Enforcement’ (Research Paper No 519, University of Melbourne Legal Studies, 18 January 2011) 102–18.Google Scholar See also Beaton-Wells, Caron and Parker, Christine, ‘Justifying Criminal Sanctions for Cartel Conduct: A Hard Case’ (2013) 1 Journal of Antitrust Enforcement 198, 213.CrossRefGoogle Scholar

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¹⁶ See, eg, Stucke, above n 15; Beaton-Wells, above n 15; Whelan, Peter, ‘Cartel Criminalization and the Challenge of “Moral Wrongfulness”’ (2013) 33 Oxford Journal of Legal Studies 535CrossRefGoogle Scholar; Wardhaugh, Bruce, ‘A Normative Approach to the Criminalisation of Cartel Activity’ (2012) 32 Legal Studies 369CrossRefGoogle Scholar; Stephan, Andreas, ‘Why Morality Should be Excluded from the Cartel Criminalisation Debate’ (2012) 3 New Journal of European Criminal Law 127CrossRefGoogle Scholar; MacCulloch, Angus, ‘The Cartel Offence: Defining an Appropriate “Moral Space”’ (2012) 8 European Competition Journal 73CrossRefGoogle Scholar; Werden, Gregory J and Simon, Marilyn J, ‘Why Price Fixers Should Go to Prison’ (1987) 32 Antitrust Bulletin 917.CrossRefGoogle Scholar

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¹⁸ See, eg, Stucke, above n 15; Beaton-Wells, above n 15; Whelan, above n 16. Green's three-part framework considers culpability, social harmfulness and moral wrongfulness. It therefore provides scope to address both economic and moral dimensions of cartel behaviour, but it does not integrate economic harms with underlying explanations of moral wrongfulness in the same way as the theory advanced here. Green's framework also relies heavily on common sense understandings of moral norms, as opposed to underlying justifications.

¹⁹ See, eg, Bork, Robert H, The Antitrust Paradox (Free Press, 1978) 263–4Google Scholar; Hovenkamp, Herbert, Federal Antitrust Policy: The Law of Competition and its Practice (Thomson West, 4^th ed, 2011) 146.Google Scholar

²⁰ Cf Competition and Consumer Act 2010 (Cth) ss 44ZZRA, 44ZZRD. See also Furse, Mark and Nash, Susan, The Cartel Offence (Hart, 2004) 29–34Google Scholar; Organisation for Economic Cooperation and Development (OECD), ‘Recommendation of the Council concerning Effective Action against Hard Core Cartels’ (OECD, Recommendation C(98)35, 25 March 1998) 2(a).

²¹ We will not specifically analyse ancillary restrictions arising from other activities of the competitors, such as creating joint ventures or undertaking research to develop new technology. These restrictions, like cartels, can have anticompetitive implications; however, they are not introduced specifically to restrict competition and may offer a range of potential or actual social benefits. They are therefore classed as ancillary agreements and not naked collusion. Our analysis also excludes those rare cases of fair and efficient horizontal agreements that might, for example, fulfil the criteria in art 101(3) of the Consolidated version of the Treaty on the Functioning of the European Union [2012] OJ C 326/01.

²² Beaton-Wells, above n 15, 677.

²³ CfAspromourgos, Tony, ‘On the Origins of the Term “Neoclassical”’ (1986) 10 Cambridge Journal of Economics 265CrossRefGoogle Scholar; Friedman, Milton, Essays in Positive Economics (University of Chicago Press, 1953) 3–43.Google Scholar

²⁴ See, eg, Smith, Adam, An Inquiry into the Nature and Causes of the Wealth of Nations (W Strahan and T Cadell, 1776) bk IV, ch II, [IX]Google Scholar; Friedman, Milton, Free to Choose (Secker and Warburg, 1980) 222.Google Scholar

²⁵ Hayek, F A, ‘The Use of Knowledge in Society’ (1945) 35 American Economic Review 519, 526.Google Scholar

²⁶ Ibid 527.

²⁷ MacCulloch, above n 16, 78.

²⁸ OECD, above n 20, 5.

²⁹ Werden and Simon, above n 16, 924.

³⁰ Ibid.

³¹ Inderst, Roman, Maier-Rigaud, Frank P and Schwalbe, Ulrich, ‘Umbrella Effects’ (2014) 10 Journal of Competition Law and Economics 739.CrossRefGoogle Scholar

³² See, eg, Competition and Consumer Act 2010 (Cth) ss 44ZZRO–44ZZRP; Treaty on the Functioning of the European Union, above n 21, art 101(3); Commission Regulation (EU) 1217/2010 of 14 December 2010 on the Application of Article 101(3) of the Treaty on the Functioning of the European Union to Certain Categories of Research and Development Agreements [2010] OJ L 335/36; United States v Addyston Pipe & Steel Co, 85 F 271 (6th Cir, 1898), modified and affirmed in Addyston Pipe & Steel Co v United States 175 US 211 (1899).

³³ See, eg, Competition and Consumer Act 2010 (Cth) ss 45, 47.

³⁴ CfCohen, G A, Self-Ownership, Freedom and Equality (Cambridge University Press, 1995) 55–6CrossRefGoogle Scholar; Hayek, Friedrich A, The Constitution of Liberty (Routledge, 1960) 139.Google Scholar

³⁵ Thomas Aquinas, Summa Theologiae, I–II, q 95, art 2.

³⁶ Murphy, Mark C, Natural Law in Jurisprudence and Politics (Cambridge University Press, 2006) ch 3.CrossRefGoogle Scholar

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³⁸ Ibid 86.

³⁹ Ibid 88.

⁴⁰ See, eg, Finnis, John, Natural Law and Natural Rights (Oxford University Press, 2^nd ed, 2011) ch 9Google Scholar; Finnis, John, Philosophy of Law: Collected Essays Volume IV (Oxford University Press, 2011) 46–73.CrossRefGoogle Scholar

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⁴⁴ Many Continental European competition law regimes differentiate between ‘unfair competition law’ and ‘competition law’, while common law systems tend to merge these two categories. For instance, as mentioned above, cartels are prohibited in the US under both s 1 of the Sherman Antitrust Act 15 USC §§ 1–7 (1890) and s 5 of the Federal Trade Commission Act 15 USC §§ 41–58 (1914), which prohibit ‘unfair methods of competition’.

⁴⁵ See, eg, Hayek, above n 25.

⁴⁶ Eucken, Walter, The Foundations of Economics (T W Hutchison trans, William Hodge, 1950)Google Scholar; Eucken, Walter, ‘What Kind of Economic and Social System?’ in Peacock, Alan and Willgerodt, Hans (eds), Germany's Social Market Economy: Origins and Evolution (Palgrave Macmillan, 1989) 27CrossRefGoogle Scholar; Böhm, Franz, Eucken, Walter and Grossmann-Doerth, Hans, ‘The Ordo Manifesto of 1936’ in Peacock, Alan and Willgerodt, Hans (eds), Germany's Social Market Economy: Origins and Evolution (Palgrave Macmillan, 1989) 15.CrossRefGoogle Scholar

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⁴⁹ Eucken, The Foundations of Economics, above n 46, 152–6.

⁵⁰ See, eg, Eucken, ‘What Kind of Economic and Social System?’, above n 46, 27–45; Gerber, above n 47, 41–3.

⁵¹ Eucken, ‘What Kind of Economic and Social System?’, above n 46.

⁵² Eucken, The Foundations of Economics, above n 46, 208–13, 242–73; Eucken, ‘What Kind of Economic and Social System?’, above n 46, 27–45; Gerber, above n 47, 44–54.

⁵³ Gerber, above n 47, 44–5; Tumlir, Jan, ‘Franz Böhm and Economic-Constitutional Analysis’ in Peacock, Alan and Willgerodt, Hans (eds), German Neo-Liberals and the Social Market Economy (Macmillan, 1989) 135–6.Google Scholar

⁵⁴ Gerber, above n 47, 54.

⁵⁵ Böhm, Franz, ‘Rule of Law in a Market Economy’ in Peacock, Alan and Willgerodt, Hans (eds), German Neo-Liberals and the Social Market Economy (Macmillan, 1989) 48–52Google Scholar; Gerber, above n 47, 34–5, 45–8. The ordoliberals therefore rejected legal positivism, arguing that a concept of law focusing on formal sources ignores the critical role of underlying social norms in the legal order. See Böhm, Eucken and Grossmann-Doerth, above n 46, 17–18.

⁵⁶ Cf Hayek, above n 34, ch 10.

⁵⁷ Eucken, The Foundations of Economics, above n 46, 269–70; Gerber, above n 47, 43. The ordoliberal doctrine recognises that not every market can reach an equally competitive level. Factors such as barriers to entry and levels of demand determine the maximum potential for competitiveness. Some markets (such as the bread market) can be highly competitive, while others (such as the jet plane production market) can reach only a low level of competition.

⁵⁸ Gerber, above n 47, 49–50.

⁵⁹ Ibid 50–2.

⁶⁰ For further discussion, see Jedličková, Barbora, ‘One Among Many or One Above All? The Role of Consumers and Their Welfare in Competition Law and Policy’ (2012) 33 European Competition Law Review 568, 573–5.Google Scholar

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⁶² Willgerodt and Peacock, above n 48, 7.

⁶³ Gerber, above n 47, 52.

⁶⁴ Ibid 37–8.

⁶⁵ Ibid 38; Willgerodt and Peacock, above n 48, 8–10.

⁶⁶ See, eg, Furse, Mark, The Criminal Law of Competition in the UK and in the US: Failure and Success (Edward Elgar, 2012) 28–49CrossRefGoogle Scholar; Riley, Alan, ‘Modernising Cartel Sanctions: Effective Sanctions for Price-Fixing in the European Union’ (2011) 32 European Competition Law Review 551Google Scholar; Connor, John M, ‘Effectiveness of Antitrust Sanctions on Modern International Cartels’ (2006) 6 Journal of Industrial Competition and Trade 195.CrossRefGoogle Scholar

⁶⁷ Furse, above n 66, 29.

⁶⁸ CfMarshall, Brenda, ‘Criminalisation of Cartel Conduct: Compelling Compliance with Anti-Collusion Laws’ (2010) 3 Journal of the Australasian Law Teachers Association 11, 13.Google Scholar

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⁷⁰ This is only a presumption. We do not mean to deny that, in some circumstances, it may be appropriate to impose legal liability on a person, even though she is not morally responsible. However, this kind of strict liability should not be imposed lightly. The presumption seems even more robust in the case of criminal sanctions than for civil remedies.

⁷¹ Crowe, Jonathan, ‘Does Control Make a Difference? The Moral Foundations of Shareholder Liability for Corporate Wrongs’ (2012) 75 Modern Law Review 159, 162.CrossRefGoogle Scholar

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⁷⁴ CfHart, Henry M Jr, ‘The Aims of the Criminal Law’ (1958) 23 Law and Contemporary Problems 401, 424CrossRefGoogle Scholar; Beaton-Wells, above n 15, 679.

⁷⁵ Sections 44ZZRF–44ZZRG.

⁷⁶ Memorandum of Understanding between the Commonwealth Director of Public Prosecutions and the Australian Competition and Consumer Commission regarding Serious Cartel Conduct (2009) [2.3], [4.4]. For discussion, see Marshall, above n 68, 16–17.

⁷⁷ See generally Hart, H L A, Punishment and Responsibility (Oxford University Press, 1968)Google Scholar; Duff, R A, Intention, Agency and Criminal Liability (Blackwell, 1990).Google Scholar

⁷⁸ Sections 44ZZRF–44ZZRG, 79(1). See also at s 6(2)(g).

⁷⁹ Ibid ss 44ZZRF–44ZZRG, 79(1); Criminal Code Act 1995 (Cth) ch 2.