Commission Issues Updated Cartel Leniency Policy

The Commerce Commission has issued its revised cartel leniency and immunity policy and revised template leniency agreement.

The cartel leniency and immunity policy has been updated to reflect changes to the Commission’s cartel leniency policy resulting from the introduction of the new criminal cartel offence which came into effect on 8 April.

“The Commission will continue to consider applications for leniency in relation to civil proceedings for cartel conduct. However, only the Solicitor-General can grant immunity from criminal prosecution. Our updated Cartel Leniency and Immunity Policy explains how the Commission will continue to grant leniency in respect of civil proceedings, and how it will make recommendations to the Solicitor-General to grant immunity from criminal prosecution for cartel offences,” said Commerce Commission Chair Anna Rawlings.

The Solicitor-General has revised its Guidelines on immunity from prosecution for cartel offences, which set out the criteria the Solicitor-General will consider in deciding whether to grant immunity.

The Commission can grant leniency to the first member of a cartel to approach it, provided that individual or firm meets the requirements for leniency. The Commission will not take civil proceedings for cartel conduct against an individual or firm that has been granted leniency if they fully cooperate with the Commission's investigation and proceedings.

“The Commission has received helpful feedback from domestic and international parties during our consultation process. One of the key pieces of feedback was a request to provide more clarity around the interaction between civil leniency applications and criminal immunity applications. We have endeavoured to address this feedback in the policy where possible after further discussion with Crown Law,” said Ms Rawlings.

The Commission is holding an online-only seminar at 12pm on Wednesday 14 April to outline the key changes made to the policy. Participants can join the webinar via this link.

Background
Cartel conduct
A cartel is where two or more businesses agree not to compete with each other through conduct including price fixing, dividing up markets, rigging bids, or restricting the output of goods and services. Cartels can lead to consumers, including businesses, paying higher prices or having reduced choice and quality.

Criminalisation of cartel conduct
The new law criminalising cartels came into effect on 8 April 2021. Any cartel entered into after 8 April 2021 will be subject to the new law, including up to seven years’ imprisonment.

If a cartel was entered into before 8 April 2021, conduct after that date will be subject to the criminal legislation.

Cartel Leniency
Leniency is a key tool in detecting and deterring cartels in New Zealand. It is widely used around the world to uncover cartels. Cartels are difficult to detect and can damage the economy by removing the benefits of competition leading to higher prices and less choice for consumers.

To encourage reporting of cartels, leniency is offered to the first member of a cartel which tells the Commission about its operation and provides evidence about the cartel. This destabilises cartels and maximises the opportunities for the Commission to stop the harmful effects from cartels.

The Commission also offers use of an anonymous whistleblower tool.

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