In the half year to the end of December, the Commerce Commission took enforcement action under the Commerce Act against 34 organisations.
Commission Chairman Dr Alan Bollard said almost half the actions, 15, were against price fixing.
"Price fixing is fundamentally anti-competitive," Dr Bollard said. "It happens when competitors agree among themselves about prices, and it prevents customer choice influencing prices.
"Healthy competition leads to more choice and better prices for consumers and, in the long run, to the best structures for New Zealand's economy. Price fixing strikes at the very heart of this process.
"At the end of the day, competition is about selling goods and services to customers and price is usually a significant competitive factor that customers consider. Collusion to prevent competition over prices greatly weakens consumers' power."
Courts gave four Commerce Act decisions in the half year, all in favour of the Commission, and two involving price fixing.
The Commission entered into two settlements with organisations which signed undertakings stating how they would change their behaviour to ensure it was not at risk of breaching the Act.
The Commission issued 28 warnings that organisations were at risk of breaching the Act, 13 of these involved possible price fixing.
All Commerce Act warnings and settlements are followed-up.
"Results to date show that warnings and settlements are an excellent way of achieving compliance with the Act much more quickly than court action," Dr Bollard said.
"However, where the alleged breach is significant, a legal precedent is needed or if previous advice from the Commission has been ignored, we will take court action."
Summary of Commerce Commission enforcement action under the Commerce Act, July 1 to December 31, 1996:
Court action
The Court of Appeal upheld $500,000 penalties against Port Nelson Ltd for using its dominant position for an anti-competitive purpose and twice entering into contracts that had anti-competitive purposes.
The Christchurch High Court imposed penalties totalling $300,000 after Country Fare Bakeries Ltd and Quality Bakers New Zealand Ltd admitted fixing the price of bread in the South Island by trying to limit the discounts they would offer retailers buying from them.
The Auckland High Court imposed penalties totalling $350,000 against seven Auckland Toyota dealers who admitted fixing the price of cars by trying to limit the discounts they would offer customers. The dealers were: Albany Toyota, North Shore Toyota, North Western Toyota, Greenland Toyota, Derbyshire Toyota, Manukau City Toyota and Papakura Toyota. Court action is continuing against an eighth dealer, Giltrap City Toyota, which has not admitted breaching the Act.
The Christchurch High Court upheld the Commission's decision to decline to clear or authorise Ravensdown Corporation Ltd to acquire all the shares in SouthFert Co-operative Ltd. Ravensdown had appealed the Commission's decision.
Settlements
The Central Regional Health Authority changed its contracts with community laboratories as part of a settlement with the Commission. The effect of the contracts was to prevent any new laboratories starting in the RHA's area and to prevent laboratories operating in other areas expanding into the area.
Milford Sound Development Authority Ltd, Fiordland Travel Ltd, Tourism Milford Ltd and the Ministry of Conservation changed a deed as part of a settlement with the Commission. The deed prevented other tourist boat operators competing from Milford Sound.
Warnings
section 27, contracts arrangements or understandings substantially lessening competition: 3
section 29, competitors colluding to exclude a rival: 5
section 30, price fixing: 13
section 36, using a dominant position for an anti-competitive purpose: 5
section 37, resale price maintenance (a manufacturer or distributor trying to impose a minimum price at which goods can be resold by another business): 2
