Thursday, 08 April 2021 12:02

NZ enforcement agency gets tougher, with cartels now facing jail time Featured


New Zealand’s competition enforcement agency has got tougher on the country’s cartels, with cartel conduct - including price fixing, market allocation and bid rigging - now punishable with a term of imprisonment of up to 7 years.

The criminalisation of cartel conduct by The Commerce Commission comes after the Commerce (Criminalisation of Cartels) Amendment Act 2019 came into effect on Thursday.

The financial penalties for cartel conduct were already significant and individuals can be fined up to $500,000 and companies can be fined up to $10 million - three times commercial gain or 10% of turnover per year per breach.

Under the legislative amendments, now businesses and individuals can be liable for criminal conviction and individuals convicted of engaging in cartel conduct could face a term of imprisonment.

“Cartel conduct harms consumers through higher prices or reduced quality, and it harms other businesses which are trying to compete fairly. The introduction of possible imprisonment for cartel conduct underlines just how serious and harmful this offending is,” said Commerce Commission Chair Anna Rawlings.

Prior to cartel criminalisation coming into effect, the Commission undertook a campaign to increase awareness of cartel conduct and the new criminal penalties.

“From our face to face advocacy work we know some people do not understand what cartel conduct is or that it’s illegal, and that’s why we have been running our campaign over the last few months,” said Rawlings.

The ‘Scene of a crime’ campaign features two videos which depict illegal cartel conduct:

  • two building company owners fix prices by agreeing to manipulate bids for a job
  • two real estate agents engage in market allocation by agreeing to stop competing for listings; one will stay north of ‘Main Road’, and the other will stay south.

The camera then pulls out to reveal CRIME SCENE tape.

“Our videos and advertisements appeared in national news media and across social media channels and drove record levels of traffic to the Commission website where they can be viewed alongside our written guidance. Now more than ever, businesses and their staff need to make sure they understand the kind of commercial arrangements they should avoid to stay on the right side of cartel laws,” said Rawlings.

The Commerce Commission says businesses or individuals wishing to report cartel conduct should contact the Commission as soon as possible.

The Commission says it can grant leniency to the first member of a cartel to approach it, provided they meet the requirements for leniency, according to the Leniency policy.

And businesses and individuals can also use the Commission’s anonymous whistleblower tool.

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Peter Dinham

Peter Dinham - an iTWire treasure is a mentor and coach who volunteers also a writer and much valued founding partner of iTWire. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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