Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Goldsmith drops bid to criminalise cartel behaviour

Commerce Minister Goldsmith drops bid to criminalise cartel behaviour

By Paul McBeth

Dec. 8 (BusinessDesk) - Commerce Minister Paul Goldsmith has backed down on criminalising hard-core cartel behaviour, leaving New Zealand out of step with the US, UK, Canada and Australia, after opposition from businesses who said it would have a chilling effect on the market.

The Commerce (Cartels and Other Matters) Amendment Bill hasn't been debated in Parliament for more than a year when it passed second reading, having first been tabled four years ago after an extensive drafting process.

Goldsmith today said he plans to introduce a supplementary order paper to remove the criminalisation of cartel behaviour, saying stiff civil penalties should suffice. He has support from United Future and Act, meaning the bill will have enough backing to pass into law.

"I have re-examined the case for criminalisation, and on balance, I have recommended that the criminalisation provisions be removed," Goldsmith said in a statement. "In weighing up the benefits of criminalising cartel activity, the government had to consider the significant risk that cartel criminalisation would have a chilling effect on pro-competitive behaviour between companies."

Last year, a Productivity Commission report on competition in services industries warned criminalising cartels held a big enough risk that warranted a review within two to four years of implementation to measure its impact. That echoed the business community's sentiments during the drafting and select committee process for the bill, which drew on international research suggesting consumers face prices of up to 20 percent higher because of price gouging.

To offset the impact of criminalising cartel behaviour the bill introduced a clearance regime for firms to test whether collaborations would breach competition law to given them greater legal certainty.

Goldsmith will retain that collaboration aspect, which the Productivity Commission report said would ease smaller firms' reluctance to enter into those sorts of deals.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Reserve Bank: Official Cash Rate Unchanged At 1 Percent

The Monetary Policy Committee has decided to keep the Official Cash Rate (OCR) at 1.0 percent. Employment remains around its maximum sustainable level while inflation remains below the 2 percent target mid-point but within our target range... More>>


Food Prices: Avocados At Lowest Price In Almost Three Years

Avocados are at their cheapest average price since February 2017, with tomato, lettuce, and cucumber prices also falling, Stats NZ said today. More>>

Auckland Port Move: Cabinet Ministers Deliberate On Report

Cabinet ministers now have a copy of a report urging the government to move the Auckland port up north, but say no final decisions have been made. More>>


Toxicology Tests Planned: Dead Rats Washed Up On Beaches

As many as 600 rats washed up on Westport's North Beach over the weekend to the horror of locals. DOC said they may have been killed by a recent 1080 poison drop 140km away and washed down the Buller River after heavy rain battered the coast. More>>