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Jail call for worst Kiwi colluders

By Rob Hosking

Friday 28th February 2003

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Pressure is growing from across the Tasman for New Zealand to adopt criminal sanctions for breaches of competition law.

The Australian government is reviewing that country's Trade Practices Act ­ the equivalent of New Zealand's Commerce Act ­ and a major theme of the review is increasing harmonisation of competition law between the two countries.

However, harmonisation could mean a jail term in the case of what the Australian Competition and Consumer Commission calls "hardcore collusion."

The ACCC, which has tended to enter political debate in a manner quite alien to New Zealand's Commerce Commission ­ is advocating criminal penalties, including prison terms for serious breaches of competition law.

New Zealand should take the same approach, ACCC mergers commissioner Ross Jones told an IIR conference in Wellington. Fines were not a sufficient deterrent, he said.

"We should join the US, Canada, Korea, Japan, now the UK and some other parts of the world in having criminal sanctions for collusion."

The issue has been raised before in New Zealand ­ in 1997 officials from the then Ministry of Commerce released a paper advocating such a move but that initiative was not taken up by the government of the day.

Criminalising competition law breaches was not necessary for New Zealand, Chapman Tripp partner Grant David told The National Business Review. "The OECD has described our existing regime as a benchmark that other countries ­ including Australia ­ could follow," he said. The OECD had recognised that if a country operated a sufficiently strict but flexible, financial penalty regime, "it is possible to fashion a sufficient deterrent simply through financial sanctions."

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