Probe Launched into Supply-Chain Cartel Conduct

Set up to identify and investigate potential cartel conduct, an international probe has been launched looking into global supply chains.

The investigation includes the Australian Competition and Consumer Commission, Canadian Competition Bureau, UK Competition, Markets Authority, the US Department of Justice Antitrust Division and New Zealand’s Commerce Commission.

Regulators noted that cartel conduct harms consumers by preventing businesses from providing quality services at better prices. Importers and businesses like retailers thus lose the ability to compete fairly if competitors agree on price-fixing, allocating markets, restricting outputs or services which is not necessary for any given situation.

The multilateral group is designed to share intelligence and use existing international cooperation tools to help detect cartel conduct arising from supply chain disruptions at a time when global supply chains are under enormous pressure through Covid impacting workers and transport services.

“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 Commerce Commission chair, Anna Rawlings.

She stressed that there will be zero tolerance for unscrupulous business practices using Covid as an opportunity for cartel conduct. Individuals involved in cartel conduct can be liable for a term of imprisonment of up to seven years as well as financial penalties.

The Australian Competition and Consumer Commission deems cartels ‘immoral and illegal’ because they not only cheat consumers but other businesses too.

Australia’s Competition and Consumer Act not only prohibits cartels under civil law but also makes it a criminal offence for businesses and individuals to participate in a cartel.