2011/12 was another successful year for us in which we made real progress towards achieving our goals of more competitive markets, better informed consumers, and better targeted and more effective regulation. Ultimately, through achieving these goals we are contributing to building a healthy, competitive New Zealand economy.
Highlights in the competition area for 2011/12
- We obtained our first banning order under the Credit Contracts and Consumer Finance Act in December 2011, preventing bankrupt and convicted fraudster Trevor Allan Ludlow from setting up, operating, or working in the consumer finance industry.
- We had many successful interventions by our low level inquiry unit which included our investigaton of Protecta Insurance. They charged policy holders a fee for cancelling policies but failed to disclose this. As a result of our intervention, Protecta refunded over $44,000 to 840 policy holders at a direct cost to the Commission of only $850.
- We achieved significant penalties in international cartel cases, including $8.85 million to date against cartelists in the freight forwarding industry and penalties of more than $16 million as at June 2012 against cartelists in the air cargo market. In addition, Empresa Brasileira de Compressores S.A was fined $3 million for exchanging information with a competitor in the refrigerator compressors market.
- We also had success in the first phase of our proceedings in the air cargo price-fixing case. The High Court decided that inbound air cargo services were supplied in a market in New Zealand, and that the Court had jurisdiction to hear the Commission's case in full.
- We made good progress in our advocacy work to raise awareness of competition laws in New Zealand including targeting specific industries such as the construction sector. We also launched a new teaching and learning module for the business studies and social studies curricula in secondary schools, based on our DVD An Evening with the Fair Trading Act.
- We received a High Court ruling, which dismissed Godfrey Hirst NZ Limited’s appeal of the authorisation we had granted Cavalier Wool Holdings for the acquisition of New Zealand Wool Services International.
Highlights in the regulation area for 2011/12
- In December 2012, the High Court found that the Commission’s processes for setting input methodologies were robust, despite finding the need for us to consult on one further point. As Justice Clifford commented, the Commission did what it was required to do, and what it said it would do.
- Telecom agreed to pay $31.6 million in compensation in a negotiated settlement after we took enforcement action alleging discrimination against other telecommunications companies in breach of the Telecom Separation Undertakings.
- We completed a preliminary review of domestic milk markets and concluded that there was no valid basis for a price control inquiry under Part 4 of the Commerce Act at that time.
As an organisation we continue to work in busy and challenging times, but we are well structured and adequately resourced to meet these demands. We have made changes to how we work to become more efficient and have managed our financial risks prudently. As with many government agencies, we continue to look for ways to operate more effectively.
“We have achieved a significant amount in the last year. While we continue to work on refining the measurements of our success, and being able to tell that story, I am confident we are moving in the right direction,” said Dr Mark Berry, Commerce Commission Chair.
The full version of our Annual Report 2011/12 will be available shortly to download from our website.
