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Anti Competitive Cartel Activities

By Tony Johnson - 26 Mar 2010

The Government recently signaled a strong possibility of creating criminal offences for anti-competitive activities. Currently, proceedings brought under the Commerce Act for anti-competitive activities are civil proceedings and the penalties are financial.


Prior to May 2001, if the Court accepted that inappropriate anti-competitive activity had occurred, it could impose pecuniary penalties of up to

  • $100,000 against individuals
  • $300,000 against body corporates.

In May 2001 the maximum penalties were substantially increased.  For a body corporate, the Court can now impose whatever sum is the greatest of:

  • $10,000,000 or
  • Three times the value of any commercial gain or
  • 10% of the turnover of the body corporate (if commercial gain cannot be readily ascertained)

For individuals, the Court can impose a penalty of up to $500,000.

Having regard to these already substantial penalties, there are opposing views as to whether criminalization is appropriate.

Arguments against criminalization
  • The cost of introducing such a regime compared to actual measurable benefits
  • The difficulty of determining appropriate prison sentences
  • The fact that the size of New Zealand's economy means that interaction between competitors at least at some level is inevitable.
Arguments in favour of criminalization
  • This sort of regime already exists with our major trading partners
  • There needs to be a substantive deterrent
  • It is difficult to truly establish potential losses to the public from anti-competitive activities.

We expect the Government to comment further on this issue soon.

If you have any queries or if you are approached by the Commerce Commission about these types of issues, please contact Tony Johnson.


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