Bill to make cartel conduct a criminal offence
Hon Kris Faafoi
Minister of
Commerce and Consumer Affairs
15 February 2018 MEDIA STATEMENT
Consumers and business will benefit from legislation introduced to Parliament today which will make it a criminal offence to engage in cartel conduct.
Commerce and Consumer Affairs Minister Kris Faafoi has today 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”.
More information on the Criminalisation of Cartels Bill can be found here.