The Commerce Commission has today filed proceedings in the High Court in Auckland alleging the collusive fixing of prices in the waste oil industry.

The Commission began investigating the waste oil industry in 2006 following an approach by a whistleblower. It is alleged that representatives of ERS New Zealand Ltd (ERS NZ), one of the largest providers of waste oil services in New Zealand, approached another major provider and attempted to fix prices for the provision of certain waste oil collection services.

Proceedings under the Commerce Act are being taken against ERS NZ and one unnamed director of ERS NZ.

The two companies in this case are involved in the collection and disposal of waste oil, such as waste lubricant oil used in motor vehicles and fuel which is collected from the slop tanks of ocean going vessels.

"The Commission encourages businesses which are subject to price fixing attempts by their competitors to inform the Commission," said Commerce Commission Chair Paula Rebstock. "Businesses should also be aware that the Commission has Leniency and Cooperation policies. These policies give protection to whistleblowers by granting them immunity from prosecution."

There will be no further comment as the matter is now before the courts.

Background

The purpose of the Commerce Act is to promote competition in markets for the long-term benefit of consumers in New Zealand. To this end, the Act prohibits a range of anti-competitive conduct.

The price fixing provisions of the Act prohibit a range of collective behaviour among competitors. Price fixing is considered harmful because it interferes in the competitive determination of prices, resulting in potentially higher prices for consumers.

Of relevance in this instance is section 30 of the Act, which prohibits competitors from agreeing to fix prices for goods and services they supply or acquire. Section 27 deems such behaviour to substantially lessen competition. Section 80 provides for the imposition of penalties on any person who has attempted to breach the Act, or has attempted to induce another person to do so.

If the Court finds that a person has attempted to breach the Act, or has attempted to induce another person to do so, substantial penalties may be imposed: up to $10 million for companies, and up to $500,000 for individuals.