On 15 February 2018, Commerce and Consumer Affairs Minister, Kris Faafoi, tabled the Commerce (Criminalisation of Cartels) Amendment Bill (Bill) in the House. The Bill introduces a new criminal offence for cartel conduct, which includes a penalty for individuals of imprisonment of up to seven years. If enacted, there would be a two-year transitional period before the offence comes into effect.

Surprisingly, the Bill comes only 6 months after the Government (at that time, the National Party) enacted major changes to New Zealand’s cartel laws. (A summary of those changes is available on our website.) The Commerce (Cartels and Other Matters) Amendment Act 2017 – which was introduced in 2011 but only finally enacted in a substantially different form in August 2017 – originally included a proposed criminal offence, but that was dropped. Then-Minster of Commerce and Consumer Affairs Paul Goldsmith’s media release at the time cited the “significant risk that cartel criminalisation would have a chilling effect on pro-competitive behaviour“.

The Bill is set down to have its first reading next week, before it will be referred to Select Committee for consideration.

In his press release on the Bill, Minister Kris Faafoi said:

“[t]his [Labour] Government wants to take a strong stance against business people who collude against the interests of consumers. Many of our trading partners, including Australia, have a criminal offence for cartel conduct.

Criminalisation of cartels will also help the Commerce Commission to investigate international cartels, as overseas competition agencies in jurisdictions with criminal sanctions will be able to offer more cooperation to the Commission under their laws.”

Links:

  • Copy of the Bill.
  • Minister Faafoi’s media statement regarding the Bill.
  • Copy of the Cabinet paper seeking approval to introduce a new criminal offence.
  • Our newsletter at the time cartel criminalisation was originally dropped from the Commerce (Cartels and Other Matters) Amendment Bill.
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