New Zealand: Criminalisation of Cartels

Last Updated: 29 January 2010


The latest Competition and Market Regulation from DLA Phillips Fox is now available below.

Criminalisation of Cartels

Simon Power, the Minister of Commerce, yesterday announced the release of a discussion document on the introduction of criminal penalties (including imprisonment) for those guilty of participation in cartels. The Minister's announcement follows the recent criminalisation of cartel conduct in Australia - the relevant reforms coming into effect over the Tasman on 24 July last year.

In making yesterday's announcement, the Minister commented:

'Many cartels are so big that the current fines are seen as a cost of doing business, rather than a deterrent, so I believe it's time to look at further measures to deter potential cartels. Several countries, including the United States, United Kingdom, Canada, and Australia, have criminalised cartel behaviour and it's important that New Zealand keep in step with those countries—especially Australia. New Zealand is committed to ensuring that businesses operating in both the Australian and New Zealand markets are faced with the same consequences for the same anti-competitive conduct. The discussion document canvasses the arguments for and against criminalisation and considers how we could do this. I am keen to hear what the public think.'

Click here for discussion document. Submissions close on 31 March 2010.

The policy issues

The Discussion Paper states:

  • That the single intervention most likely to have a significant impact on deterrence and detection of cartel conduct is the possibility of imprisonment. It records that since the introduction of criminal penalties in Australia, the Australian Competition and Consumer Commission (ACCC) has reported an increase in leniency applications (whereby participants in cartels offer to 'come clean' and 'dob in' other participants in return for immunity from the ACCC).
  • There are however difficulties in defining a criminal offence which covers only hard core cartel conduct (price fixing, bid rigging, market allocation and agreeing to restrict output) deserving of imprisonment, without also deterring pro-competitive or efficiency-enhancing conduct.
  • The higher criminal standard of proof together with the administrative costs involved in imposing jail terms need to be considered. Criminal investigations can be more costly than civil investigations because of the high standard of proof and the strict rules of evidence that apply.

Options for criminalisation

In terms of options for criminalisation of cartel conduct the Discussion Paper considers and discusses three approaches:

  1. Creating an offence based on the existing civil prohibitions in the Commerce Act – the advantage of this is that the existing language and concepts in the Commerce Act are familiar and have been considered in a number of existing cases. Thus it would potentially provide more certainty to business in the event criminalisation was introduced. On the other hand, the disadvantage would be that existing uncertainties in our current civil law would become part of the new criminal offence provisions but the stakes would be significantly higher in that businesses and individuals who are deemed to have got it wrong would potentially be subject to criminal penalties.
  2. Adopt the Australian offence provisions – the Australian approach has been to introduce both criminal offences and parallel civil prohibitions focusing on what are considered to be the key types of 'hard core' cartel behaviour. The main advantage of this approach would be harmonisation with Australia. The disadvantage would be that the NZ criminal provisions would contain the same deficiencies (if any) as the Australian ones - already a number of criticisms have been levelled against the Australian provisions.
  3. A greenfields approach whereby the NZ criminalisation provisions are drafted from scratch – the advantage of this would be that it would afford an opportunity to address any perceived deficiencies in the Australian criminalisation provisions and under the existing NZ civil provisions. The disadvantage of this would be that it would be untested and therefore until the courts began to issue decisions under the new law there would potentially be greater uncertainty than under either of the other two options.

Bill of Rights Act

Criminalising cartel conduct raises serious issues of compliance with the New Zealand Bill of Rights Act 1990. In particular, reconciling the rights of those suspected of an offence with the Commerce Commission's currently broad powers requiring individuals to attend interviews with the Commission and to produce documents is potentially problematic.

Where to from here

The Discussion Paper reaches a preliminary conclusion that there is a case for criminalisation. The Minister's words in introducing the paper are more non-committal. However, with the advent of criminalisation in Australia, it may well be virtually inevitable that criminalisation now follows here. If so there is before 31 March a relatively brief, but commendably early opportunity for those potentially impacted by these reforms, to make submissions with the aim of ensuring New Zealand adopts the best possible approach.

© DLA Phillips Fox

DLA Phillips Fox is one of the largest legal firms in Australasia and a member of DLA Piper Group, an alliance of independent legal practices. It is a separate and distinct legal entity. For more information visit

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.