The Commission's role in dealing with anti-competitive behaviour
This page was updated5 months ago
One of our central purposes is to safeguard the integrity of competitive markets to ensure businesses and consumers feel confident they are not being unfairly disadvantaged. To achieve this, it is important New Zealanders understand our role and the ways in which we exercise our powers and functions.
Investigations into anti-competitive conduct under the Commerce Act can be complex and time-consuming. The key factors we must determine in such cases are firstly whether any anti-competitive conduct has occurred and secondly the extent of its impact or potential impact on a market. As anti-competitive conduct can have far-reaching consequences in distorting markets and disadvantaging consumers through higher prices or reduced quality, it is Commission policy to prioritise Commerce Act investigations.
Guidelines and policies
To help businesses and consumers better understand our investigation processes, policies and enforcement criteria, we have published a series of documents:
Investigation Guidelines – these guidelines detail our investigation processes and decision-making steps.
Enforcement Criteria – these criteria apply at every stage of an investigation and enforcement process.
Enforcement Response Guidelines – these guidelines outline our enforcement response model and the enforcement response options that apply following an investigation, and include our Criminal Prosecution Guidelines.
Cartel Leniency Policy and Cooperation Policy – these policies explain how parties with information can choose to assist the Commission and receive penalty discounts.
We also proactively release educational materials and hold workshops with business groups to raise awareness of anti-competitive conduct – how to spot it and avoid it.
Investigative powers under the Commerce Act
When investigating anti-competitive conduct, the Commission is able to request information and interviews either voluntarily or through compulsion, and execute search warrants. We can also offer leniency, including immunity from prosecution, to parties who choose to assist our investigations. In the majority of cases our enforcement response is decided at the conclusion of an investigation.
In the event that an investigation uncovers criminal conduct, such as fraud, we may choose to refer a case to the Police or Serious Fraud Office for further investigation and prosecution.
Enforcement options under the Commerce Act
Where the Commission considers that a person or business may have breached the law, we will take into account the extent of the harm, the seriousness of the conduct and the public interest when determining our response. Enforcement options available to us include low-level responses such as compliance advice or warning letters, through to taking a prosecution in the High Court. In many instances we are willing to resolve cases through negotiated settlement, which typically requires the defendant to cease the unlawful conduct, make some admission of liability and pay a penalty set by the courts.
Penalties under the Commerce Act
The courts can impose significant penalties on a person or business found guilty of anti-competitive conduct.
In the case of an individual, the maximum penalty is $500,000 for each offence and up to 7 years in prison for each offence.
In the case of a body corporate (ie business), the maximum penalty per offence is the greater of:
$10 million, or
either three times the value of any commercial gain resulting from the contravention; or if the commercial gain cannot be readily ascertained, 10% of the turnover of the body corporate and all of its interconnected bodies corporate (if any).
Financial penalties remain the same for civil and criminal offences