Com Com increases prosecution of cartels

Two recent judgements on cartel activity in New Zealand are an indication of the increased investigation into cartel activity by the Commerce Commission.

Commerce Commission’s competition director Deborah Battell says the commission is pursuing court action against nine cartels in the New Zealand court system.

“The Commerce Commission is investigating more cartel cases this year compared with the previous year and is beginning to investigate more allegations of domestic cartel activity,” she says.

The Court of Appeal decided last week that Nufarm executives Elias Akle, Neil Harris and Andrew Poynter could be prosecuted although for cartel activities within New Zealand even though they are based outside the country.

This decision, which relates back to price fixing and market sharing by Nufarm companies with competitor Koppers Arch.

However, the decision has a larger impact than for just those involved.

Minter Ellis Rudd Watt partner Andy Matthews, who specialises in competition and regulatory law, says that the judgement was important because it means those overseas, companies or individuals, can be found to have breached the act if the cartel was implemented in New Zealand.

Mr Matthews says that regulators around the world were enforcing cartel activities and this guidance from the Court of Appeal would aid in enforcement here.

Ms Battell attributes the Commerce Commission’s increasing numbers of court cases against cartels on the leniency policy it had introduced.

Under the commission’s leniency policy companies and people are guaranteed immunity from prosecution if they are the first to inform the commission of the activity and then cooperate with the investigation.

Ms Battell says four of the present cases going through court are the result of people informing the commission under the leniency policy.

“The commission believes that more activity is coming to light as a result of the leniency policy and the publicity surrounding cartels."