Justice Middleton has penalised Telstra $18.55 million for denying infrastructure access to competitors, indicating that the contraventions ‘demonstrate substantial non-compliance by Telstra with its legal obligations’. The fine was assessed at $26.5 million, but reduced to $18.55m following a 30% discount. Although not satisfied Telstra had expressed any ‘remorse’ over their conduct and noting that they had not demonstrated an ‘appreciation of the seriousness of the admitted contraventions’, the discount was held to be justified because of a ‘large degree of co-operation … and … an acceptance of responsibility and the implementation of a compliance program’.
The decision is particularly interesting in its discussion of corporate compliance. One of the factors relevant to the size of penalty imposed will be whether a company has a ‘corporate culture conducive to compliance with the Act’ and Justice Middleton emphasised that higher fines for breaches will be imposed where internal compliance programs are inadequate. Amongst other things, Justice Middleton noted:
Telstra had the ability to properly implement its policies so it would comply with its statutory obligations, but did not do so. At the very least, Telstra did not turn its corporate mind to the essential aspect of implementation …
The relevant managers and employees were not properly trained in relation to Telstra’s access obligations, or otherwise failed to comply with any training that was given to them, and Telstra had no adequate system for checking on compliance. …
Telstra failed to put in place exchange access processes and procedures which would ensure that Telstra meet the required regulatory and legal obligations. Telstra also failed to provide the necessary oversight to ensure that Telstra was fulfilling its access obligations. This is not a case in which junior employees ignored directions from senior management. The staff involved were not low level staff but experienced staff. In the period from 2006 to 2008, I find that Telstra took no steps to develop a culture of compliance with its access obligations under the TPA and the Telecommunications Act
View Federal Court decision. View ACCC press release.
See also news items/reviews, including:
- ‘Telstra fined $19m for blocking wholesale rivals‘ (Bingemann, The Australian)
- ‘Telstra to be focused, for the first time‘ (Maiden, SMH)
- ‘Telstra up to its old tricks again‘ (Durie, The Australian)
- ‘Telstra fine for breaching competition laws has lessons for all‘ (Clayton Utz)
- ‘Telstra fined $18.5m for anti-competitive behaviour‘ (Donovan, ABC)
Competition Law 