Avoiding restrictive trade practices
4 June 2025
If you are in business, you need to understand what counts as 'anti-competitive behaviour' or 'cartel conduct' and how to avoid it.
In a small country, with a tight-knit sector, GasNZ member businesses will often know their competitors – and their competitors’ staff – pretty well. Often competitors will meet together for entirely legitimate reasons (for example, at GasNZ events and committees!)
This increases the risk of falling foul of New Zealand’s strict prohibitions on anti-competitive behaviour under the Commerce Act. The penalties for breach are significant, and they do get applied – so everyone managing a business needs to:
understand those provisions,
remains alert to situations that may pose risk, and
put in place systems to ensure your business never strays into risky territory.
This article directs you to some basic advice from the Commerce Commission on how to avoid restrictive trade practices.
The Commerce Act prohibits:
Anti-competitive behaviour: contracts, arrangements or understandings that have the purpose, effect, or likely effect of substantially lessening competition in a market [Section 27]
Cartel conduct: agreements between competitors containing a provision having the purpose, effect, or likely effect of price fixing, restricting output or market allocating. [Section 30]
Importantly, you should note that merely reaching agreement – a “meeting of the minds” – is generally sufficient to breach the law: you or your staff do not need to document an agreement, or do any further act to actually carry out the agreement.
The Commerce Commission’s website has good information on cartel conduct, which you can access here: https://comcom.govt.nz/business/avoiding-anti-competitive-behaviour/what-is-a-cartel.
They have also has issued three excellent fact sheets that include examples from NZ and Australia of price-fixing, agreements between competitors, and other cartel conduct.