Perth education consultants fined over Korean deals

The Federal Court in Perth has imposed penalties totalling $125,000 on a number of educational services agents for fixing the price of placement services provided to students of Korean origin.

The education agents advised prospective students about educational institutions in which they could enrol and arranged the enrolment and payment of tuition for these students. The education agents would be paid commissions by the educational institutions for these services.

Justice French has ordered Kokos International Pty Ltd to pay $60,000 in pecuniary penalties for breaching the price fixing provisions of the Trade Practices Act 1974 and ordered its director, Mr Chul Woo Kim, to pay $12,500 for being knowingly concerned in the contravention.

The court also ordered that IAE Edu Net Perth Pty Ltd pay $34,000 in pecuniary penalties and its director, Mr Young Gil Pae, pay $8,000 for being knowingly concerned.

Two further individuals, Ms Sang-Hong Jung trading as Nanuri Education Centre and her office manager Ms Rebekah Cabalt were ordered to pay pecuniary penalties of $9,000 and $1,500 respectively for their involvement in the price fixing conduct.

The Australian Competition and Consumer Commission instituted proceedings on 1 November 2006 alleging that the parties made and put into effect oral and written agreements in 2004 and 2005 that they would not offer or accept discounted tuition fees from students.

The Federal Court also made orders restraining the companies and individuals from engaging in similar conduct in the future and required the companies to implement appropriate compliance measures.

ACCC Chairman, Graeme Samuel, said price fixing affects competition among businesses but ultimately it is Australia's consumers who suffer from price fixing.

"Any conduct that inhibits competitive pricing in growing markets, such as the education of overseas students in Australia, will not be tolerated," Mr Samuel said.

"The penalties imposed by the court will impact on the respondents' financial position and should serve as a deterrent to all businesses which seek to gain an illegal advantage through price fixing."

Although penalties have been handed down against the majority of the parties in the action, the case is continuing as the court considers further orders, including declarations, and the imposition of penalties against the remaining parties. A further directions hearing has been scheduled for 4 March 2008.