Cartels involve illegal agreements between competitors not to compete with each other, such as price fixing, the restriction of outputs, the allocation of customers, suppliers or territories, and bid rigging.
The Cartel Leniency Policy does not cover other types of anti-competitive conduct such as a company taking advantage of a substantial degree of market power or resale price maintenance.
Leniency is a key tool in detecting and deterring cartels in New Zealand. It is widely used around the world to tackle cartels. Cartels are difficult to detect and can damage the economy by removing the benefits of competition leading to higher prices and less choice for customers.
To encourage reporting of cartels by cartelists, conditional immunity from prosecution is offered to the first member of a cartel who tells the Commission about its operation and provides evidence to the Commission. This destabilises cartels and maximises the opportunities for the Commission to stop the harmful effects from cartels.
The Commission released its updated Cartel Leniency Policy on 1 March 2010. The updated Cartel Leniency Policy provides greater clarity and certainty for immunity and cooperation applicants. This assists the Commission to be better able to detect and break up cartels operating in New Zealand, providing benefits for consumers, businesses, markets, and the economy. It also fosters the deterrence of new cartels.
The Commission's pre-existing general Cooperation Policy no longer applies to cartels. Formal cooperation applications for cartels are now covered by the Cartel Leniency Policy.
