Commerce Com. Against St John and Helicopter Trust
Commission action against Auckland Rescue Helicopter Trust and Order of St John
Commerce Commission action has stopped potential breaches of the Commerce Act by the Auckland Rescue Helicopter Trust (ARHT) and the Order of Saint John Auckland Region (OSJ).
Commission Chairman John Belgrave said that, in the Commission’s view, ARHT and OSJ had acted anti-competitively in two ways.
First, they had colluded over tenders for Accident Rehabilitation and Compensation Insurance Corporation (ACC) and Health Funding Authority (HFA) contracts. They agreed that ARHT was to tender for ACC work, OSJ was to tender for HFA work and they would not compete for the contracts.
Secondly, they colluded to restrict OSJ’s competitor’s, EMT Ambulance New Zealand Limited (EMT), ability to get work.
“Their anti-competitive arrangement had the potential to increase the cost of ambulance services in Auckland, an area that has one third of the country’s population,” Mr Belgrave said.
ARHT and OSJ are the only providers of air ambulance services in Auckland. OSJ also provides road ambulance services in Auckland.
EMT is the only other provider of road ambulance services in the area. It has won contracts for road ambulance work previously done by OSJ.
EMT provides specialist road ambulance services to intensive care units at Starship and National Women’s Hospitals. Transporting critically ill children and babies between ARHT’s aircraft and these hospitals is a major part of its work.
OSJ wanted ARHT to terminate its contract with EMT and instead go back to using OSJ to provide road ambulance services. ARHT agreed to do this.
However, because of the Commission’s investigation, the collusion between ARHT and OSJ has had little effect.
The Commission has ended its
investigation with a settlement. ARHT and OSJ have given
signed undertakings including:
- acknowledgment that they may have breached the Commerce Act (sections 27 and 29);
- that they will terminate their arrangement over tendering for ACC and HFA work;
- that they will not collude against EMT or anyone else;
- that if they do not honour the settlement the Commission can take court action; and
- to have the Commission publicise the settlement.
Section 27 of the Commerce Act prohibits contracts, arrangements or understandings that substantially lessen competition.
Section 29 prohibits competitors colluding against a rival. It is important to note that companies do have the right to say “no, I will not do business with you”. However, they must make that decision unilaterally and must not discuss it with a competitor.