KEY POINTS:
Two Australian business cartel commentators are urging the New Zealand Commerce Commission to avoid repeating the glitches in Australia's prosecution model.
Australia aims to criminalise serious cartel behaviour by the end of 2008.
Price-fixing and competition law experts Brent Fisse and Caron Beaton-Wells from the University of Melbourne have compiled a paper highlighting the flaws in the Australian proposal.
The research identifies the main issues the New Zealand Government should address if it chooses to adopt a similar cartel regime.
Fisse and Beaton-Wells presented their paper - The Australian Criminal Cartel Regime: A Model for New Zealand? - at the Competition Law and Policy Institute of New Zealand's annual workshop, held over the weekend. At the moment both Australia and New Zealand can impose multi-million-dollar civil penalties to businesses convicted of cartel behaviour, but a cartel offence would increase deterrence by introducing a jail sanction, Fisse said.
"Politically there is a strong case not just in New Zealand but around the world for introducing offences against price-fixing and market-sharing because of the very significant economic damage that they can do in market economies."
But if New Zealand rolls out a prosecution model it should look carefully at how it defines an offence.
The Australian definition includes an admission of "dishonesty" which will prove too difficult to interpret and too complex for jury trials, Fisse said.
The research also suggests New Zealand would be better-off appointing a single organisation to investigate cartels.
Australia proposes to give the Australian Competition and and Consumer Commission and the Director of Public Prosecutions separate responsibilities, and Fisse said this will prove impractical. He understood the New Zealand Government was keeping a close eye on the development of cartel policy across the Tasman.
Two weeks ago the Commerce Commission announced it had filed criminal charges in the Auckland District Court against Cathay Pacific Airways, Singapore Airlines Cargo and Aerolineas Argentinas for alleged price-fixing.
