Waste oil 'price fixing' settled out of court

Photo / Greg Bowker

Government regulator the Commerce Commission has reached an out of court settlement with New Zealand's largest provider of waste oil services, over price fixing allegations.

The commission investigated ERS New Zealand after a whistleblower provided a secret tape-recording of a meeting in which a director of ERS NZ discussed future price increases with a competitor.

Price fixing is illegal under the Commerce Act.

In March 2009 the commission filed proceedings in the High Court in Auckland against ERS NZ and the director alleging that the conversation was an attempt to fix prices with a competitor.

Those proceedings have now been withdrawn.

ERS NZ has agreed to pay a 'significant sum' to the commission towards the costs of the investigation, and has agreed to ensure its directors and senior executives undertake competition law compliance training.

A Commerce Commission spokesperson said part of the agreement with the company was that the amount paid would not be made public.

General manager of enforcement at the Commerce Commission, Kate Morrison said price fixing harmed competition, and could result in customers paying higher prices.

"Under the legislation, it doesn't matter whether an attempt to fix prices was successful, the conversation in itself may breach the Commerce Act," she sid.

"In this case we have taken into account that the company recognises the imprudence of the alleged price-fixing attempt, has undertaken to improve compliance training, and has made payment towards our investigation costs.

The commission believes this provides satisfactory resolution without the need for court proceedings," Morrison said.

Morrison commended the whistleblower for not agreeing to the price-fixing attempt and approaching the commission.

"The commission's leniency policy gives protection to whistleblowers by granting them immunity from prosecution."

- NZ HERALD ONLINE