Gas industry supplier Qteq attempted to rig tender and is guilty of cartel conduct, Federal Court finds

A Queensland mining services company and its chairman are facing huge fines after being found guilty of cartel conduct, including attempting to rig a multimillion-dollar tender.

Qteq chief technology officer Dr Tim Hopper, chief executive and chairman Simon Ashton, and chief operating officer Ewan Meldrum.

Queensland mining services company Qteq could face several individual fines of up to $10m each after it was found to have engaged in “cartel conduct” – including its attempts to get its suppliers to rig a multimillion-dollar tender, a federal court has ruled.

The court said Qteq and its executive chair, Simon Ashton, had made several attempts to get its suppliers to sign contracts with “cartel provisions” which included prohibiting them from supplying other large oil and gas companies, and to share markets.

It was also found to have attempted to rig a multimillion-dollar tender.

The Federal Court ruling arrived after the Australian Competition and Consumer Commission filed proceedings against the company and Mr Ashton in December 2022.

Qteq was found to have engaged in cartel-like conduct on five occasions over a two-year period between 2017 and 2019. The company was found not guilty of another allegation brought by the ACCC.

Qteq now faces a maximum penalty of up to $10m per contravention or, three times the total of the benefits obtained or – if the total value of benefits cannot be determined – 10 per cent of its Australian annual turnover.

Mr Ashton could face an individual fine of up to $500,000.

Cartel conduct includes the use of price fixing, sharing markets, rigging bids, and controlling output and claims.

The consumer watchdog considers cartel conduct to have taken place when businesses act together rather than compete and “attempt to increase members’ profits while maintaining the illusion of competition”.

Its chair, Gina Cass-Gottlieb, said she hoped the findings would send a strong message to the mining industry that cartel-like conduct would not be tolerated.

“Cartels are the most fundamental attack on competition in our economy, and taking actions against them is a high priority for the ACCC,” she said.

“Today’s decision should send a strong warning to all businesses and senior managers that attempting to enter or induce collusive agreements with a competitor is illegal and will be met with strong enforcement action by the ACCC.”

Qteq’s main business involves providing the installation of down-hole pressure gauges for natural gas producers.

The company also operates methane emission detection products and provides smart sensors and “internet of things” services for mining and construction.

Qteq was the market leader during the period between 2017 and 2019 when it was found to have on five occasions committed cartel-like conduct.

The company’s headquarters is in Brisbane and it has four further offices in Brisbane, Roma, Toowoomba and Townsville.

The Federal Court is yet to set a date for a further hearing when it will consider submissions and a penalty.

In August 2023, steel manufacturer BlueScope was handed a $57.5m fine – the largest ever penalty imposed in Australia for “cartel conduct”. The company attempted to overturn the fine in August last year.

In February last year, waste giant Bingo Industries was fined $30m – the second highest penalty for cartel-like conduct.

Aussie Skips Bin Services and Aussie Skips Recycling received a $3.5m fine alongside Bingo Industries, after both companies were found to have fixed and increased prices.

In December, the ACCC began civil proceedings against Spotless Facility Services and Ventia Australia, as well as four senior executives, over alleged price fixing in estate maintenance for the Department of Defence.

Originally published as Gas industry supplier Qteq attempted to rig tender and is guilty of cartel conduct, Federal Court finds