Competition Agencies Working Together To Identify Potential Cartel Conduct In Global Supply Chains

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

The working group includes the Australian Competition and Consumer Commission, Canadian Competition Bureau, United Kingdom Competition and Markets Authority and United States Department of Justice Antitrust Division.

Commission Chair Anna Rawlings says that as a member of this multilateral group the Commission will be part of a wider effort to share intelligence and use existing international cooperation 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, and here in New Zealand we’ve seen businesses respond by cooperating responsibly to ensure New Zealanders continue to be supplied with essential goods and services,” says Ms Rawlings.

“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 continued efforts to deter and penalise cartel conduct.”

Cartel conduct harms consumers by preventing businesses competing to provide better quality services at better prices, and it harms businesses that are trying to compete fairly. It can include competitors agreeing on pricing and pricing intentions, allocating markets or customers, or restricting the output of goods or services where it is not necessary in the current situation.

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

“In addition to financial penalties, since April 2021, individuals involved in cartel conduct can be liable for a term of imprisonment of up to 7 years so it is more important than ever that businesses, their directors and employees make sure they understand how to 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 Commission can grant leniency to the first member of a cartel to approach it, provided they meet the requirements for leniency.

More details on the Leniency policy can be found on the Commission’s website. Businesses and individuals can also use the Commission’s anonymous whistleblower tool.

Further guidance on business collaborations under COVID-19 can also be found on our website.

Background
Details on the International working group
The working group includes the Australian Competition and Consumer Commission, Canadian Competition Bureau, United Kingdom Competition and Markets Authority and United States Department of Justice Antitrust Division.

The Commerce Commission has signed a multilateral assistance and co-operation framework to enhance international cooperation on competition enforcement with these agencies, including cooperation on investigations, work on joint projects and inter-agency training initiatives.

Cartel conduct
A cartel is where two or more businesses agree not to compete with each other including by price fixing, allocating markets or customers, rigging bids, or restricting the output or acquisition of goods and services.

Cartel conduct is prohibited under section 30 of the Commerce Act. As of 8 April 2021, cartel conduct is now punishable with a term of imprisonment of up to 7 years, underlying just how serious and harmful offending of this nature can be. Conduct which occurred before 8 April 2021 is not subject to these new penalties.

You can find more details about cartel conduct on the Commission’s website.

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