Prison sentences for cartel conduct are now a stark reality in Australia, with the Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008 set to become law in just weeks.

Having been passed by Federal Parliament earlier this week, the legislation criminalises price fixing, market sharing, bid rigging and arrangements to restrict output. It imposes gaol terms of up to 10 years and fines of up to $10m for corporations and $220,000 for individuals caught breaking the law. The amendments also enhance the ACCC's investigatory powers, granting it the ability to use telephone interception powers in addition to other investigatory tools such as search warrants and compulsory notices.

The ACCC has already stated that it will not engage in civil settlement negotiations where criminal prosecution is available. It is therefore vital that corporate Australia is made aware that these offences will have application from the time the legislation comes into force, which is expected to be early August. While it does not apply retrospectively, the continuation of any existing cartel arrangements will be a criminal offence.

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