SYDNEY - THE Australian government will strengthen anti-competition laws so that business people who collude to fix prices will face up to five years in jail, Competition Minister Chris Bowen said on Wednesday.

The development comes after one of the country's richest men, cardboard box magnate Richard Pratt, was last year fined a record A$36 million (S$45.4 million) but escaped jail time over a secret pricing deal with a rival firm.

Labor Prime Minister Kevin Rudd, who came to power in November, has promised to monitor the rising cost of petrol, groceries and housing and reportedly wants to act against predatory pricing and other anti-competitive practices.

'Cartel is theft. It's stealing off consumers,' he told commercial radio.

'In several countries around the world, if you operate a cartel, you go to prison. So we'll legislate to have prison terms for cartel operations.'

Existing law allows for fines but no prison sentences for price-fixing.

Mr Bowen said this meant businesses felt they could engage in cartel behaviour because if they were caught, the fine would be less than the potential profits.

'But (if) you've got the possibility of five years at Her Majesty's pleasure, you'll think a lot more closely about entering into those side deals,' he said.

The minister said under current law, it was very difficult for the national consumer watchdog to prove anti-competitive practices and the government would strengthen some sections of the Trade Practices Act to make it easier to prosecute cases.

Until now, the Australian Competition and Consumer Commission (ACCC) 'has been fighting with one arm tied behind them,' he said.

'We've found that the courts have interpreted the Trade Practices Act in such a restrictive way that the ACCC really looks at a lot of cases and says, 'Well, we think this stinks, we think this is terrible behaviour, but we just can't get a prosecution in the court',' Mr Bowen said. -- AFP

Is this article useful to you?