In a move affecting all members of the New Zealand Taxi Federation (NZTF), the Commerce Commission has investigated price fixing involving two taxi companies.

Commission Chairman Dr Alan Bollard said that the investigation showed a serious misunderstanding of the law by the NZTF and its members.

"The NZTF and its members believed incorrectly, that parts of the Commerce Act did not apply to them," Dr Bollard said. "They believed that their companies could discuss and agree on standard prices.

"Competitors agreeing on prices is price fixing and is illegal. Taxi companies are not protected from this by the Transport Services Licensing Act."

The Commission accepts that the NZTF and its members had misunderstood the part of the Transport Services Licensing Act that allows a company to impose uniform rates on its own drivers.

"Drivers in one company can discuss prices, but drivers from different companies cannot," Dr Bollard said. "And nor can the companies discuss prices with each other.

"Such behaviour is prohibited by the Commerce Act because it is anti-competitive. It prevents customer choice influencing prices."

In this case, the two biggest taxi companies in Christchurch, Blue Star (Christchurch) Society Limited and Gold Band Taxis (Christchurch) Society Limited, set mutually agreed standard fares. This happened four times between May 1994 and October 1996.

The Commission learned of the arrangements last month. All parties involved have fully co-operated with the Commission, helped the investigation progress quickly, and, today, signed a settlement.

While no other taxi companies in New Zealand have, to the Commission's knowledge, adopted the approach taken by Blue Star and Gold Band, the terms of the settlement should prevent them doing so in future.

NZTF has given signed undertakings to:

· publicise to all its members that agreeing on prices is price fixing and is illegal; and

· not be involved in any way in any future price fixing arrangements of any kind.

The companies have given signed undertakings to:

· immediately stop discussing or agreeing on prices; and

· not be involved in any way in any future price fixing arrangements of any kind.

Media contact: Commerce Act Manager Jo Bransgrove

Phone work (04) 498 0958

Communications Officer Vincent Cholewa

Phone work (04) 498 0920

Commerce Commission media releases can be viewed on its web site www.comcom.govt.nz