Criminalisation Of Cartel Behavior - Research

Media Statement
Wednesday 27 January 2010

Research Reviews Criminalisation Of Cartel Behaviour

The criminalisation of hard-core cartel behaviour by businesses is the subject of a research paper released by the Ministry of Economic Development today.

It is part of a series of Occasional Papers released regularly by the Ministry, and assesses key literature that looks at the case for and against criminalisation of hard-core behaviour.

The paper concludes that hard-core cartel behaviour can be considered morally offensive and therefore deserves to be treated as a criminal offence.

Also, it proposes that criminalisation may act as a deterrent where fines and other measures have not proved sufficient.

The paper’s author, Ministry official David King, says jail introduces a significant stigma and loss of liberty which should more effectively deter cartels.

“This conclusion is subject to determining whether a criminal offence can be defined at law with sufficient certainty for businesses,” says Mr King.

“Hard-core cartels involve anti-competitive agreements between competitors to limit production and raise prices in order to maximise profits.

“There are many cases where it is efficient for businesses to work together and it is important that such activity is not deterred inadvertently by the way cartel behaviour is defined in law.’

The Minister of Commerce, Simon Power, today released a discussion document on criminalisation of cartel behaviour, which includes consideration of many issues raised in this research paper, including how best to define the offence.

The Ministry’s occasional papers reflect the views of the author and not necessarily those of the Ministry of Economic Development.

The copy of this Occasional Paper is available at: http://www.med.govt.nz/cartel-behaviour.

ENDS

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