Aramex and GoSweetSpot settle civil proceedings for cartel conduct brought by Co…

The Commission and each of Aramex and GoSweetSpot have agreed settlements to resolve the separate proceedings. A penalty hearing will be scheduled for each shortly.

The Commission does not allege that Aramex and GoSweetSpot entered into an agreement with each other. Rather, Aramex has admitted to entering into and giving effect to a contractual arrangement that allocated customers and fixed prices between itself and another competitor in the courier services market.

Separately, GoSweetSpot has admitted to entering into and giving effect to contractual arrangements that allocated customers between itself and another competitor in the courier services market.

Both of the contracts were negotiated in the context of reseller/carrier arrangements. As detailed below, Aramex is a carrier that provides courier transportation services to customers. GoSweetSpot is a reseller, which ‘brokers’ the provision of courier transportation services to customers. Both resellers and carriers can compete for the same customers.

As the proceedings are now before the court, the Commission will not be providing further detail or comment at this time.

Background

Courier services

Courier services involve all aspects of the logistical arrangements necessary to collect and deliver parcels in New Zealand by road, rail, air and/or sea. Courier services are offered for the purpose of transporting parcels from one business to another, from businesses to their customers, or from one individual to another.

Suppliers of courier services operate using different business models. They include carriers who have operational control over transportation assets that physically handle goods, for pick up and/or delivery within New Zealand. They also include resellers, sometimes known as “brokers”, who contract with carriers to provide courier services to customers.

What is a cartel?

A cartel is where two or more businesses agree not to compete with each other including by price fixing, allocating markets or customers, rigging bids, or restricting the output or acquisition of goods and services.

Because cartel members make more profit than they would if they competed fairly, goods and services become more expensive, consumers end up with fewer choices, and quality and service levels are likely to deteriorate. Tackling cartels is one of the Commission’s enforcement priorities.

The Commerce Act

Cartel conduct is prohibited under section 30 of the Commerce Act. As of 8 April 2021, cartel conduct became punishable with a term of imprisonment of up to 7 years, underlying just how serious and harmful offending of this nature can be.

Section 31 and 32 outline exceptions to the cartel prohibition, for vertical supply and collaborative activity arrangements.