Crackdown on cartel action

New Zealand’s regulator joins competition agencies to identify potential breaches of cartel laws across global supply chains.

Posted on 22 February, 2022

The Commerce Commission has joined with international counterparts in a working group focusing on the identification of potential cartel conduct in global supply chains.

The group includes the Australian Competition and Consumer Commission, Canadian Competition Bureau, UK Competition and Markets Authority, and US Department of Justice’s anti-trust division.

As a member of this multi-lateral group, the Commerce Commission will be part of a wider effort to share intelligence and use existing international co-operation tools to help detect and investigate potential cartel conduct arising from disruption in global supply chains.

“We recognise that Covid-related supply-chain issues have created significant challenges for economies worldwide,” says Anna Rawlings, who chairs the commission.

“Here in New Zealand, we’ve seen businesses respond by co-operating responsibly to ensure New Zealanders continue to be supplied with essential goods and services.

“However, we still have zero-tolerance for unscrupulous businesses using Covid as an opportunity for cartel conduct, such as non-essential collusion between competitors or anti-competitive behaviour. The international working group will strengthen our efforts to deter and penalise cartel conduct.”

Cartel conduct harms consumers by preventing businesses competing to provide better quality services at better prices and harms businesses trying to compete fairly. It can include competitors agreeing on prices and pricing intentions, allocating markets or customers, or restricting the output of goods or services when it’s unnecessary to do so in the current situation.

“In addition to the work we are doing as part of the international working group, we’ve undertaken a range of educational initiatives to increase businesses’ understanding of cartel conduct and its consequences,” adds Rawlings, pictured.

“In addition to financial penalties, since April 2021 individuals involved in cartel conduct can be liable for a term of imprisonment of up to seven years, so it’s more important than ever that businesses, directors and employees make sure they stay on the right side of the law.”

Businesses or individuals wishing to report cartel conduct should contact the commission as soon as possible. The regulator can grant leniency to the first member of a cartel to approach it, provided requirements for this are met.