Consumers and business will benefit from legislation introduced to Parliament this week which will make it a criminal offence to engage in cartel conduct.
Commerce and Consumer Affairs Minister Kris Faafoi yesterday tabled the Commerce (Criminalisation of Cartels) Amendment Bill, which includes imprisonment as a criminal penalty.
“Price fixing and other cartel conduct harms honest New Zealand businesses, consumers and the wider economy. It stifles emerging businesses, impacts on consumers if they are not getting the best deal the market could offer, and limits growth by undermining competition.
“I do not believe New Zealand’s existing civil regime provides sufficient disincentives for cartel conduct so we are acting to stop it,” says Mr Faafoi.
“My hope is that the risk of imprisonment acts as a strong deterrent and reflects the seriousness of the harm that can be caused.
“New Zealand has a well-respected and robust business environment and we are not suggesting there is a significant issue here. At the same time though, I believe there’s a need to provide certainty of operating environment to enable businesses to compete without the intrusion of cartel type behaviours. I have also been clear that I intend to ensure consumers are getting a fair deal across the board.”
Mr Faafoi says that his Bill provides clarity and that honest business should have no concerns.
“This isn’t about limiting anyone’s ability to run their business and we will retain sound provisions of the current legislation, for example the allowance for collaboration between competitors. I will ask the Commerce Commission to assist by preparing good guidance for business as well as supporting collaborations by providing business with clearances on arrangements.”
Changes to the Commerce Act in 2017 enabled wider collaboration between firms, and expanded the range of prohibited conduct to include price fixing, restricting output, and allocating markets, but did not change the civil prohibition regime in the Commerce Act. “However this Government wants to take a strong stance against business people who collude against the interests of consumers. Many of our trading partners, including Australia, have a criminal offence for cartel conduct.
“Criminalisation of cartels will also help the Commerce Commission to investigate international cartels, as overseas competition agencies in jurisdictions with criminal sanctions will be able to offer more cooperation to the Commission under their laws.”
Mr Faafoi says he hopes the business community and other stakeholders will become involved when the Bill has its first reading in Parliament and moves through the select committee process.
“I have been clear that across the Commerce portfolio my aim is to work with the business community to achieve the most robust and efficient New Zealand business environment possible – that is in everyone’s interests.”
The Bill has broad support from the coalition partners. Parliamentary Under-Secretary Fletcher Tabuteau, New Zealand First commerce spokesperson says “this was part of the original legislation that should never have been removed”.