Taranaki flooring company warned over attempts to fix prices

The Commerce Commission has issued a formal warning to flooring company Ansell Flooring Limited for attempting to fix prices for sanding and polishing services in the Taranaki region.

In December 2012 and January 2013, Ansell Flooring Limited attempted to enter into an arrangement with a competitor to control the price for floor sanding and concrete polishing services in the region. Agreeing prices with your competitor, or even attempting to reach an agreement on prices, is illegal under the Commerce Act.

The Commission opened an investigation after receiving a complaint from Ansell Flooring Limited’s competitor about the behaviour. The investigation uncovered text messages sent by Ansell Flooring Limited to its competitor, proposing a minimum price for floor sanding and an increase in prices generally.

“Attempts to fix prices in any industry are serious. Price fixing harms competition and can lead to consumers paying higher prices,” said Kate Morrison, Commerce Commission General Manager Competition.

“We credit Ansell Flooring Limited’s competitor for recognising the anti-competitive behaviour and reporting it to the Commission,” said Ms Morrison.

“Ansell Flooring Limited cooperated with the Commission’s investigation and in this case, we’ve decided a warning is appropriate. However, we won’t rule out stronger enforcement action in the future if there are further allegations of anti-competitive behaviour by Ansell Flooring Limited,” said Ms Morrison.

Background

Under section 30 of the Commerce Act it is illegal to enter into a contract, arrangement or understanding that has the purpose, effect, or likely effect of fixing, controlling or maintaining the price of goods or services.

Section 80 of the Act prohibits persons from attempting to contravene a provision of Part 2 of the Act.

Penalties for breaching any provision of Part 2 of the Commerce Act, including section 30, can be up to $10 million for companies and $500,000 for individuals. Only the High Court can determine if the Act has been breached.