Online bullion trader warned over alleged attempt to fix prices
27 June 2012
An online bullion dealer has received a warning from the Commerce Commission for an alleged attempt to fix the price of bullion sold on Trade Me last year.
In June and July 2011, Silver Seller Limited, and one of its directors Jacob Martin, allegedly attempted to form an agreement with a competitor to fix prices for bullion sold on Trade Me. Price fixing, or even attempting to reach an agreement to fix prices, is illegal under the Commerce Act.
The competitor alerted Trade Me and the Commission. Trade Me subsequently banned Silver Seller from trading on its website.
The Commission's investigation uncovered emails from Mr Martin to his competitor suggesting they agree a fixed price for gold and silver bullion sold online. The competitor did not respond to the approach. The Commission, following its investigation, has decided to warn rather than prosecute Silver Seller and Mr Martin.
"Price fixing harms competition, downstream businesses and consumers. An attempt to fix prices in any industry or market is viewed seriously by the Commission," said Commerce Commission Manager, Competition, Ritchie Hutton.
"Silver Seller's competitor did the right thing by raising the alarm. In doing so they prevented any harm to consumers, and also avoided themselves becoming a target of our investigation," said Mr Hutton.
The Commission would not rule out stronger enforcement action in future if there were further allegations of anti-competitive behaviour by Mr Martin or Silver Sellers.
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. Only the High Court can determine if the Act has been breached.