The Commerce Commission has launched three new tools it will use to maximise the effectiveness of its enforcement activity in relation to anti-competitive and false and misleading behaviour.

At a function for business leaders and government officials in Wellington this evening (Thursday, 25 November), Chair Paula Rebstock announced the introduction of three new policies relating to leniency, co-operation and cease and desist orders.

Ms Rebstock said the Commission had introduced its new Leniency Policy to tackle anti-competitive cartel behaviour. The Policy targets whistle blowers by offering immunity from Commission initiated proceedings to the first person involved in a cartel that comes forward with information about the cartel and co-operates fully with the Commission.

"The Policy is intended to encourage a race to be first to the Commission. It is designed to create a level of tension and distrust between members of a cartel, maximising the motivation for cartel members to come forward," said Ms Rebstock.

"Cartels are by their nature very difficult to detect, involving secretive, collusive behaviour such as price fixing or market rigging. Overseas experience has clearly demonstrated that providing incentives to cartel members to be the first to share information about the conduct is critical to enforcement."

Ms Rebstock referred to a number of cases taken by the Commission where it was highly reliant on obtaining evidence from individuals and businesses closely involved in the behaviour.

"In previous cartel investigations such as the Commission's cases relating to the car dealerships, vitamins and petrol companies, and most recently the Ophthalmological Society, there is likely to have been significant benefit in such a clear cut policy that might have motivated individuals or businesses to be the first to come forward to share information with the Commission," Ms Rebstock said.

"The Leniency Policy will also be important for the Commission to protect the confidentiality of its information."

The Commission's new Co-operation Policy sits alongside the Leniency Policy, but has broader application, applying to the Commission's enforcement work not only under the Commerce Act, but also under the Fair Trading, Credit Contracts and Consumer Finance, Dairy Industry Restructuring and Electricity Industry Reform Acts.

"The effect of the Co-operation Policy is that the Commission will exercise its discretion to take a lower level of enforcement action, or no action at all, against an individual or business in exchange for information and co-operation," said Ms Rebstock.

The Commission has also adopted a new policy on cease and desist orders to specifically tackle anti-competitive behaviour under the Commerce Act.

"The Commission has specific powers whereby it can obtain cease and desist orders to restrain anti-competitive conduct or to require a person to do something to restore competition or the potential for competition in a market," said Ms Rebstock.

The Guidelines set out the approach the Commission proposes to follow in relation to the application of the cease and desist order provisions in the Commerce Act.

Ms Rebstock said the Commission was focused on maximising its enforcement impact and is looking for significant outcomes from the implementation of these new policies.

"The introduction of these policies will provide valuable certainty to businesses that deal with the Commission," Ms Rebstock said.

 

Media contact:

Media wishing to speak to Paula Rebstock, Chair, should contact

Jackie Maitland, Communications Manager

Phone work (04) 924 3708, mobile 0275 24 3708