Competition Agencies Look to Identify Cartel Conduct in Global Supply Chains

supply chain cartels

The Commerce Commission has joined with international counterparts in a working group focussing on the identification of potential cartel conduct in global supply chains.

The working group includes the Australian Competition and Consumer Commission, Canadian Competition Bureau, United Kingdom Competition and Markets Authority and United States Department of Justice Antitrust Division.

Commission Chair Anna Rawlings said that as a member of this multilateral group the Commission will be part of a wider effort to share intelligence and use existing international cooperation tools to help detect and investigate potential cartel conduct arising from disruption in global supply chains.

“We recognise that Covid-related supply chain issues have created significant challenges for economies worldwide, and here in New Zealand we’ve seen businesses respond by cooperating responsibly to ensure New Zealanders continue to be supplied with essential goods and services,” said Rawlings.

“However, we still have zero-tolerance for unscrupulous businesses using Covid as an opportunity for cartel conduct, such as non-essential collusion between competitors or anti-competitive behaviour. The international working group will strengthen our continued efforts to deter and penalise cartel conduct.”

Cartel conduct harms consumers by preventing businesses competing to provide better quality services at better prices, and it harms businesses that are trying to compete fairly. It can include competitors agreeing on pricing and pricing intentions, allocating markets or customers, or restricting the output of goods or services where it is not necessary for the current situation.

“In addition to the work we are doing as part of the international working group, we have undertaken a range of educational initiatives to increase businesses’ understanding of cartel conduct and its consequences,” said Rawlings.

“In addition to financial penalties, since April 2021, individuals involved in cartel conduct can be liable for a term of imprisonment of up to 7 years so it is more important than ever that businesses, their directors and employees make sure they understand how to stay on the right side of the law.”

Businesses or individuals wishing to report cartel conduct should contact the Commission as soon as possible. The Commission can grant leniency to the first member of a cartel to approach it, provided they meet the requirements for leniency.

More details on the Leniency policy can be found on the Commission’s website. Businesses and individuals can also use the Commission’s anonymous whistleblower tool.