The Commerce (Criminalisation of Cartels) Amendment Act comes into force in New Zealand today. This means that:
- It is a now a criminal offence under the Commerce Act to enter into or give effect to a cartel provision while intending to engage in “price fixing”, “restricting output” or “market allocating”.
- Cartel law is designed to prevent business rivals from colluding and agreeing not to compete with each other, for example agreeing not to undercut one another’s prices.
- The cartel prohibition is drafted broadly and so all agreements between potential competitors should be carefully considered.
- A defence is available if, at the time of the alleged contravention, you believed on reasonable grounds that an exception applied. This belief cannot be based on ignorance or a mistake of law.
- Stakes are high because if convicted:
- Individuals can be jailed up to 7 years and fined up to NZ$500K.
- Non-individuals can be fined up to the greater of NZ$10M, 3x the value of any commercial gain resulting from the contravention, and, if commercial gain cannot be readily ascertained, 10% of the turnover of all interconnected bodies corporate.
- Parties can seek criminal immunity by applying to the Commerce Commission (Commission) who can recommend the Solicitor-General to grant immunity from criminal prosecution.
- The Commission’s newly updated Cartel Leniency and Immunity Policy Guidelines explain the conditions that must be met and the process that must be followed for immunity to be recommended.
- The Solicitor-General’s Guidelines on Immunity from Prosecution for Cartel Offences also explain the process and requirements for grant of immunity.
For more information please see our one-page summary on cartel law and other relevant resources under “Downloads & papers” or get in touch with a team member at Matthews Law.
Other links
Commerce Commission media release
Andy Matthews interview for Radio New Zealand’s Midday Business News