The Commerce Commission is warning local authorities and other owners of event venues - these are facilities like convention centres, stadiums and sports fields - that they must not discuss their prices with each other.

The Commission's Commerce Act Manager, Jo Bransgrove, said that such discussions would put those involved in danger of breaching the Commerce Act by price fixing.

Ms Bransgrove said that councils, trusts and all other public and private sector organisations must understand that the Act applies to their trading activities in exactly the same way as it does to companies and other businesses.

"If an activity is 'in trade' - and hiring out events venues clearly is - then it is covered by the Act," she said. "The rules under this Act are the same for all behaviour that is 'in trade' - it is not who that counts, but what they are doing."

This year, the Commission has decided that one of its key activities will be helping local authorities understand the Act.

Overall, local authorities own a large proportion of the country's assets and their trading activities have considerable impact on the economy. Historically they have had a regulatory role, and today are not always aware of what the Act requires of them in a competitive environment.

The specific issue of hiring of events venues arose when the Queenstown Lakes District Council tried to introduce a standard pricing structure for the hiring of all sports facilities in its area, irrespective of who owns them.

After initial inquiries the Commission warned the District Council on Wednesday that the proposal appears to put the Council at risk of breaching the Act. The Commission is satisfied with the Council's response, will not be launching a full investigation and does not intend to take this particular matter any further.

Other action taken by the Commission and involving local authorities includes:

  • Christchurch City Council electricity company, Southpower, paid $450,000 costs to the Commission and restructured its businesses to settle court action taken against it for alleged breaches of the Act;
  • Christchurch City Council bus company, Christchurch Transport Limited, and the company's Chief Executive admitted breaching the Act, the Christchurch High Court imposed penalties and costs totalling $400,000;
  • the Commission has decided to take court action against a private sector company and a council owned business, the names of which will be released after court documents have been served on the defendants; and
  • the Commission has accepted settlements from three councils, North Shore City, Palmerston North City and Western Bay of Plenty District, including signed undertakings of how they will change their water, storm water and waste water contracts to ensure that they are not anti-competitive.

Media contact: Commerce Act Manager Jo Bransgrove

Phone work (04) 498 0958, cellphone 021 630 466

Communications Officer Vincent Cholewa

Phone work (04) 498 0920

Commission media releases can be viewed on itsweb site www.comcom.govt.nz