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Price-fixing Brazilian fridge parts maker seeks settlement

Monday 10th October 2011

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The Commerce Commission has settled with Empresa Brasileira de Compressores S.A. (Embraco), which makes refrigeration compressors, for fixing prices in New Zealand.  

The competition regulator and the manufacturer today made a joint submission to the High Court in Auckland on what kind of penalty Embraco should face for engaging in a cartel.

The commission alleges the Brazilian company met with a competitor and exchanged information relating to the local supply of fridge compressors in 2005 and 2006, leading to senior staff agreeing to increase prices for units shipped into New Zealand.

The commission began its investigation in 2009 after receiving information from a whistleblower, who subsequently was granted immunity.

“Collusion between major players in any market has the potential to harm other competitors,” competition general manager Kate Morrison said in a statement. “Our leniency programme has proved effective at flushing out participants in a number of such illegal agreements.”

The government is considering whether to introduce criminal penalties for cartel behaviour, which would introduce stiffer fines and the prospect of imprisonment for colluding on prices.

The commission has been an advocate of introducing criminal sanctions, and is currently pursuing international airlines and freight forwarders, alleging a global air cargo cartel.

More details of today’s settlement will be announced once the judge has decided on the size of Embraco’s penalty.


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