Two cases delivered significant wins for the Commission and New Zealand consumers during February.
Gas distribution company First Gas Limited was fined $3.4 million for anti-competitive conduct, and the High Court has dismissed Budget Loans’ appeal against a $720,000 fine.
First Gas to pay $3.4 million
First Gas admitted engaging in anti-competitive conduct when acquiring the Bay of Plenty gas distribution assets of Whanganui-based GasNet Limited.
Commission Chairman Dr Mark Berry said First Gas adopted a concerted strategy designed to force GasNet to leave the Bay of Plenty. This strategy included taking steps to duplicate pipelines GasNet had laid in new property subdivisions. GasNet sold the business to First Gas and signed a restraint of trade agreement.
In her judgment Justice Mallon said: “The conduct has removed existing competition and is likely to have removed future competition in the market for the foreseeable future.”
Dr Berry said, “the penalty handed down by the High Court reflects the seriousness of this conduct and is sufficient to ensure that First Gas will not profit from the acquisition. It is also a reminder to businesses that anti-competitive acquisitions are a priority area for the Commission and if there is any doubt about the competition effects of a merger, they should seek clearance from us first.”
Budget Loans appeal dismissed
In May 2018 Budget Loans was fined $720,000 in the Auckland District Court on 125 charges under the Fair Trading Act 1986. The charges related to misrepresentations made while collecting loans. It was also ordered to pay reparation totalling $109,000.
In dismissing Budget Loans’ appeal Justice Moore said the offending was “among the most serious of its kind. There is no comparable case involving such damaging, prolonged, focused, cynical, personal and economic conduct.”
He noted that reparation orders had not been complied with, and “given the parlous circumstances of most, if not all of the victims, this circumstance sits uncomfortably with any suggestion on the part of the companies that they have co-operated.”
The Commission is seeking management banning orders against Budget Loans’ current and former directors Allan Hawkins and Wayne Hawkins.