Buyer and seller beware – “Gun Jumping” on ACCC radar

Buyer and seller beware - “Gun Jumping” on ACCC radar

Great care is needed on any potential sale or acquisition involving competitors (or potential competitors) to ensure the parties do not contravene broad civil penal and criminal prohibitions on cartel conduct in the Competition and Consumer Act . Particular care is required after an agreement is signed but before completion of the transaction, where coordination between buyer and seller can amount to cartel conduct. The parties to the transaction must remain independent and continue to act as competitors until completion of the deal. Such conduct has been considered and prosecuted in other jurisdictions, particularly the United States, but not until now in Australia where some parties may naively not consider application of our cartel conduct law after agreement has been reached. It is now clear that the ACCC will take action where appropriate. It has now announced commencement of the first such proceedings in Australia in the Federal Court against Cryosite Limited for pecuniary penalties and other relief (Release No. 125/18 at ). Cryosite and Cell Care Australia Pty Ltd were the only private suppliers of cord blood and tissue banking services in Australia when: Cryosite signed an agreement to sell its assets in its cord blood and tissue banking business to Cell Care. On signing the agreement, Cell Care made an upfront, non-refundable payment of $500,000 to Cryosite. The asset sale agreement required Cryosite to refer all customer enquiries to Cell Care after the agreement was signed but before the acquisition was completed. The ACCC alleges this […]

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