A Wellington taxi company has been taken to court over accusations of price fixing.
The Commerce Commission today confirmed it has filed proceedings in the High Court at Wellington against Hutt and City Taxis Limited.
The Commission alleges Hutt & City breached the Commerce Act by reaching a price-fixing agreement with two competing taxi companies to implement a minimum charge of $25 for pickup taxi trips from the on-demand taxi rank at Wellington Airport.
It said the agreement was reached in September last year, following initial discussions in previous years, and that it took effect in October.
It's alleged the fare was implemented through the distribution of stickers displaying the minimum charge to be placed on taxi vehicles.
"The conduct ceased in November 2020, after the Commission began investigating," the Commission said in a statement.
They also allege Hutt & City tried to reach the same price-fixing agreement with a third taxi company.
The Commission is seeking a declaration that Hutt & City contravened, and attempted to contravene, the Commerce Act, along with financial penalties and costs.
The Commission has also issued warnings to four former directors of Hutt & City over their role in the alleged conduct. The former directors are Rahid Amin, Sathishkumar Dharndapani, Dharmendra Krishnan, and Paul Swain.
"In the Commission's view, the four former directors of Hutt & City likely have accessory liability for Hutt & City's alleged contravention of the Commerce Act."
A warning has also been issued to a separate company Kiwi Cabs Limited, over its role in the alleged conduct.
The practice, referred to as "cartel conduct" harmed consumers by preventing businesses from competing to provide better quality services at better prices.
It also harmed other businesses which were trying to compete fairly, said Commission chairwoman Anna Rawlings.
Cartel conduct includes price fixing, market allocation and bid rigging.
"It is important that businesses and their directors are aware of the seriousness of this kind of conduct, and ensure they understand how to stay on the right side of the law," she said.
Cartel conduct is now punishable with a term of imprisonment of up to seven years, underlying just how serious and harmful offending of this nature can be.
Conduct which occurred before April 8, 2021, like the alleged conduct in this case, is not subject to these new penalties.
Individuals can also be fined up to $500,000, while companies can be fined up to $10 million, three times commercial gain or 10 per cent of turnover per year per breach.