The Commerce Commission has filed civil proceedings in
the High Court against two international freight forwarding
companies, Mondiale Freight Services Limited (Mondiale) and
Oceanbridge Shipping Limited (Oceanbridge), and four
individuals associated with the companies, alleging each
company entered into and gave effect to cartel
agreements.
The Commission alleges the defendants
agreed with competing freight forwarders not to compete for
their customers. These were separate cartels and the
Commission does not allege Oceanbridge and Mondiale entered
into any agreements with each other. The competing freight
forwarders also purchased freight forwarding services from
the defendants.
The Commission has agreed settlements
to resolve the separate proceedings with each of the
defendants. A penalty hearing will be scheduled
shortly.
As this case is now before the Court, the
Commission cannot comment further at this
time.
Background
International
Freight Forwarding
International freight forwarding
refers to all aspects of the logistical arrangements for the
movement of cargo in and out of the country, by air or sea.
Generally, international freight forwarders do not
physically carry the cargo between countries, but arrange
for it to be moved by a third party, such as an airline or
shipping line, as well as offering a range of other related
services (such as customs clearance).
The alleged
arrangements in this case relate to agreements reached prior
to the COVID-19 pandemic. The arrangements took place before
and after the Commerce Act was amended in 2017. All conduct
ceased before 8 April 2021.
Cartel conduct
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.
Cartel
conduct is prohibited under section 30 of the Commerce Act.
Before section 30 of the Act was amended in 2017, it
prohibited price fixing. The Commission alleges that the
conduct in this case breached both the former price fixing
prohibition and the prohibition against cartel
conduct.
As of 8 April 2021, cartel conduct is now
punishable with a term of imprisonment of up to 7 years,
underlying just how serious and harmful offending of this
nature can be. Conduct which occurred before 8 April 2021 is
not subject to these new penalties.
You can find more
details about cartel conduct on the Commission’s website.
