Commerce Commission reminds industry: comply with statutory information requests or face prosecution

The Commerce Commission is prosecuting three airlines for not providing information and documents during an investigation into allegations of price-fixing and other anti-competitive conduct in the air cargo industry.

The Commission has filed criminal charges against Cathay Pacific Airways, Singapore Airlines Cargo Pte Ltd and Aerolineas Argentinas. The charges relate to alleged non-compliance with statutory notices issued under the Commerce Act in October 2007. These notices compulsorily required that the airlines provide documents and information to the Commission by a specified date in November 2007.

Statutory notices are a key investigative tool used by the Commission to gather evidence in its investigations of potential breaches of the Commerce Act including alleged cartel activity. Parties who receive notices cannot refuse to supply documents or information to the Commission as this may prejudice an investigation.

The District Court in Auckland is being asked to determine that a failure by the three airlines to provide the information as requested is a breach of section 103 of the Commerce Act. The penalties for breaching section 103 are summary conviction and fines of up to $30,000 for companies.

"Any failure to comply with Commission statutory notices that form part of a Commission investigation is a serious enforcement issue," said Commission Chair Paula Rebstock. "The information the Commission alleges was not provided in accordance with the notices could potentially be relevant to the Commission's investigation."

Ms Rebstock said, "Cartels are insidious and cause extensive damage to the New Zealand economy. They are difficult to detect and extremely difficult to investigate because of their secretive nature. If the current investigation concludes that there is a breach of the Commerce Act, the Commission will be seeking to file proceedings in the High Court later this year. The Commission will continue to strongly pursue cartels involved in price-fixing and other anti-competitive conduct."

Ms Rebstock said that increasing the effectiveness of the Commission's enforcement activity against cartels was a continuing strategic priority for the Commission. The Commission's leniency and cooperation policies are the most effective tools in helping to detect and investigate cartels. Statutory notices are also an effective tool and the Commission relies heavily on them to gain evidence from the parties under investigation.

As the investigation into an alleged cartel in air cargo markets to and from New Zealand is continuing, the Commission will be making no further comment at this time.