‘Possible cartel conduct’: Sparky association changes policy after anti-competition accusation

• The NZ Trade Group faced accusations that its conduct could breach rules against cartel behaviour.
• The electricians’ group was investigated by the Commerce Commission and has since changed its policies.
• The commission alleged NZTG’s conduct could harm competition, citing a non-solicitation clause and private rates discussions among members.

An electricians’ trade association accused of “possible cartel conduct” has changed its membership policies and shored up its messaging to members after a Commerce Commission investigation.

The conduct of NZ Trade Group (NZTG) “had the potential to harm competition”, the Commerce Commission said, and has prompted the government agency to remind other trade groups of their obligations under the Commerce Act.

NZTG’s terms and conditions included a non-solicitation clause prohibiting its members from soliciting other members’ customers, employees or contractors.

And its private Facebook group had featured posts from members discussing rates, with some “appearing to agree to price-match”, the Commerce Commission said.

“In both cases, the conduct raised issues under section 30 of the [Commerce] Act, which prohibits any person entering into a contract or arrangement, or arriving at an understanding, that contains a cartel provision,” the Commerce Commission’s Vanessa Horne said.

The commission then issued NZTG with a compliance advice letter.

Horne, the general manager of competition, fair trading and credit, said NZTG had made changes as a result of the investigation.

It had changed its terms and conditions for members and had placed a permanent banner on its Facebook group warning members against discussion and conduct that could be considered anti-competitive.

NZTG’s remedies had concluded the commission’s investigation, she said, adding that other organisations should learn from this.

“Trade associations, professional bodies and their members should be aware they could be held liable under the Commerce Act if conduct is shown to be anti-competitive. Penalties for breaching the Commerce Act can be severe, including potential imprisonment.”

Raphael Franks is an Auckland-based reporter who covers breaking news and local stories from Tāmaki Makaurau. He joined the Herald as a Te Rito cadet in 2022.

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