Commerce Commission gets go ahead on freight forwarding cartel case

The Commerce Commission has been given the go ahead to prosecute the last remaining defendant in an ongoing freight forwarding cartel case.

The Commerce Commission has been given the go ahead to prosecute the last remaining defendant in an ongoing freight forwarding cartel case.

The High Court has given the commission approval to proceed on five of the seven cartel agreements the commission alleges Kuehne+Nagel International AG made, the last defendant of six international freight forwarding companies, the commission said.

The other five defendants in the case have settled with the commission, with the High Court ordering penalties of $8.85 million, the commission said.

The case was brought by the commission last year, alleging collusion on surcharges to cover the costs of complying with security measures.

It claims that Kuehne+Nagel, based in Switzerland, gave effect in New Zealand to cartel agreements reached with competing freight forwarders.  The company challenged the commission’s jurisdiction on the basis that it was a holding company without involvement in operation or management of the freight forwarding business.

The High Court found the commission had established good arguable grounds that implementation of the alleged agreements, through its direction of, or with the consent or agreement of, companies within its corporate group.

Commerce Commission general manager of competition Kate Morrison said the decision confirmed the commission’s view of the practical reality in the case.

“It is important that the Commission is able to pursue parties in New Zealand courts for anticompetitive conduct that we allege they have implemented through their regional and local networks.”

Freight forwarding was a complex industry, the commission said, and referred to all facets of the arrangements for the movement of goods by air. 

It generated revenue of approximately $450 million for the air freight component in 2006 for services in and out of New Zealand, the commission said.