Updated Policy to Improve Cartel Leniency Programme

Updated Policy And Guidelines to Improve Cartel Leniency Programme

The Commerce Commission has updated its policy and guidelines to assist parties involved in cartel conduct to understand what steps they are required to take when applying for leniency.

Cartel conduct is hard to detect because it is often conducted in secret. Therefore, the Commission seeks to incentivise those involved in or close to cartel conduct to report behaviour such as bid rigging, price fixing and allocating markets.

The Commission’s leniency programme is a key tool to encourage reporting of cartel conduct. It offers the first party that applies for leniency the opportunity to obtain full immunity from any Commission enforcement action in exchange for full cooperation.

The updated policy and guidelines clarify what the Commission expects from parties involved in cartel conduct who apply for immunity or cooperation concessions, as well as what they can expect from the Commission.

The updated policy and guidelines can be found here.

Background

Cartels
A cartel is where two or more businesses agree not to compete with each other, which can result in higher prices and a reduction of choice and quality for consumers.

The Commission prioritises enforcement cases involving cartel conduct because of the significant harm such conduct can cause consumers, other businesses, and in some cases taxpayers.

Under the Commerce Act, the Court can impose large financial penalties for cartel conduct. An individual can be fined a maximum of $500,000 and/or be prohibited from being a company director or managing a company. A body corporate can be fined the greater of $10 million or three times the commercial gain from the breach (or if this cannot be easily established, 10% of turnover).

Guide to competition law for businesses
The Commission has a number of quick guides and animations to help businesses understand competition law. They can be found on our website.

ENDS

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