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Initiating an investigation

Who can initiate an investigation of potential cartel conduct?

The Commerce Commission can initiate an investigation into potential cartel conduct, either of its own volition or on receiving a complaint.

If an investigation is initiated by complainants or third parties, what rights (if any) do they have?

Complainants or third parties have no particular rights in relation to a Commerce Commission investigation. 

The Commerce Commission takes reasonable steps to communicate with a complainant on opening and during an investigation, but the communications will usually be limited to information about the progress and the likely timing of the investigation.

What obligations does a company have on learning that an investigation has commenced?

Companies are usually required to retain documents while the Commerce Commission conducts its investigation. The Commerce Commission may request that a company retains all relevant hard copies and electronic or digital records that may be relevant to the investigation. It may also request that any routine or otherwise planned document and information destruction be suspended or cancelled until after the investigation’s completion. 

It is an offence to knowingly mislead or deceive the Commerce Commission, including through the destruction of relevant documents or the selective provision of documents in response to a request.

There is no obligation to cooperate with an investigation by the Commerce Commission, but cooperation usually results in a discount being applied to any penalty that might be imposed. 

What obligations does a company have if it believes that an investigation is likely?

See the response above.

What are the potential consequences of failing to act or delaying action?

Delaying action or failing to act early in relation to a Commerce Commission investigation may be harmful to a party's interests if the commission later decides to take action. In contrast, the courts will consider cooperation with the commission's investigation when considering penalties.

Formal stages of investigation

What are the formal stages of and approximate timeframe for investigations?

No formal stages or timeframes apply to cartel investigations. The Commerce Commission has broad discretion as to how it conducts investigations. In general, there are two stages to an investigation. The first is the screening and prioritisation stage. The commission uses this stage to decide whether to investigate a potential cartel and may gather preliminary information. If the commission decides that an investigation is warranted, it proceeds to the investigation stage. 

When the commission has gathered enough information, it will decide whether to take enforcement action or close the investigation with no further action.  

Investigative powers

What investigative powers do the authorities have?

Under Section 98 of the Commerce Act, the Commerce Commission has the power to require a person or company to:

  • provide it with written information;
  • produce documents; and
  • give written or oral evidence.

This could include requiring a person to attend an interview.

The commission may also apply for and execute a search warrant that allows it to seize documents, computer discs, hard drives, mobile phones and other electronic devices, within the scope of the warrant.

The commission has limited powers to conduct searches without a warrant. 

Companies and individuals may also provide the commission with information and documents or agree to be interviewed on a voluntary basis.

What is the geographic reach of public enforcement actions?

If the Commerce Commission has a formal cooperation agreement with a regulator in another jurisdiction, it may ask the regulator for investigative assistance. This could include the other regulator exercising its coercive powers to gather information. 

Special provisions in the High Court Rules 2016 set out a process for issuing subpoenas to persons in Australia requiring the production of documents or things, for the purpose of trans-Tasman competition proceedings.

Otherwise, unless an overseas party has submitted to the Commerce Commission's jurisdiction, it is difficult for the commission to exercise its investigative powers against that party. The commission could exercise its powers to require a New Zealand-based party to produce any evidence that it holds, but this would not extend to any related companies outside New Zealand.

When is court approval required to invoke these powers?

The Commerce Commission is not required to obtain court approval to use its investigative powers under Section 98 of the Commerce Act. The commission must obtain a warrant from an issuing officer (ie, a judge or other authorised person) in order to conduct a search and must obtain the leave of a judge for the issue of subpoenas to persons in Australia.

Are searches of business and personal premises authorised? If so, which bodies carry out searches and will they wait for legal advisers to arrive?

Yes, the Commerce Commission can apply for a warrant to conduct searches of business and personal premises. The commission may request the assistance of others to carry out a search.

Although the commission is not required to wait for the occupier's legal advisers to arrive, if requested, it will usually provide an opportunity for the occupier of the premises being searched to contact its legal advisers.

What level of cooperation with the authorities is required and what are the consequences for failing to cooperate?

If asked, parties subject to a search warrant must give reasonable assistance to the Commerce Commission. This can include:

  • assisting the commission to identify and locate the information that it requires;
  • providing keys, passwords or other information or tools required to undertake the search; and
  • accessing or reproducing stored or recorded information. 

Resisting, obstructing or delaying the execution of a warrant is a criminal offence. Failing or refusing to comply with a Section 98 notice is also an offence. Such offences are punishable by fines of up to NZ$100,000 (for individuals) and NZ$300,000 (for companies).

Is in-house legal advice or attorney work product protected by the law of privilege? Does this extend to the advice of in-house counsel?

Yes, New Zealand recognises attorney-client privilege under both common law and the Evidence Act 2006. Privilege may extend to the advice of in-house counsel.

Parties subject to a Section 98 notice or a search warrant are not required to provide the Commerce Commission with privileged material.

Are any other limitations imposed on investigatory powers in order to safeguard the rights of those under investigation?

Although a party cannot refuse to comply with a Section 98 notice on the basis that doing so may incriminate it, any statement made by a person in response to a question put by or before the Commerce Commission is generally not admissible in proceedings for pecuniary penalties against that person.

What is the process for objecting to an authority’s exercise of its claimed powers?

In general, the only way to challenge the Commerce Commission's exercise of its powers under the Commerce Act is by way of judicial review. 

It may be possible to refine the scope of a Section 98 notice or extend the time available to produce the information described in a Section 98 notice by raising any concerns with the commission. However, that is not a formal process provided for in the Commerce Act.

Publicity and confidentiality

What information about investigations will be made publicly available and at which stage(s) of the process?

The Commerce Commission does not generally make any announcements or public statements about a cartel investigation unless it has made a decision about any enforcement action that it may take. 

However, on occasion, the Commerce Commission may announce that an investigation has been opened or is underway if an investigation is of considerable public interest or to elicit further information from the public.

If the Commerce Commission decides to take enforcement action, its general practice is to issue a media release providing a brief description of the alleged cartel conduct. If the commission decides to close an investigation without taking enforcement action, it generally does not issue a media release (unless the matter is of significant public interest). 

The commission avoids making comments on a matter that is before the courts.

Is any information automatically confidential and is confidentiality available on request?

Information is not automatically confidential, but parties can request that their information be kept confidential. 

If the commission accepts that information is confidential, it may still disclose it in some circumstances. For example, the commission may be required to disclose information if:

  • it is in the interests of public safety;
  • the information concerns other criminal offences; or
  • the commission receives a request under the Official Information Act 1982 (New Zealand's freedom of information legislation).

In relation to the latter, the act provides conclusive and good reasons to withhold information. Relevant grounds to withhold information that is part of an active investigation may include whether releasing the information:

  • is likely to prejudice the maintenance of the law; or
  • would be likely to prejudice unreasonably the commercial interests of the person that supplied or is the subject of the information, where that prejudice is not outweighed by public interest considerations that favour releasing the information.

The commission can issue confidentiality orders under Section 100 of the Commerce Act to prevent the disclosure of information to others during an investigation if it is necessary or desirable to protect the integrity of the investigation.

International cooperation

Do the authorities in your jurisdiction cooperate with authorities in other jurisdictions?

Yes, the Commerce Act enables the Commerce Commission to enter into cooperation agreements with overseas regulators to enable them to share information and provide one another with investigative assistance.

At present, the Commerce Commission has cooperation agreements with the Australian Competition and Consumer Commission and the Canadian Competition Bureau. The Commerce Commission also has an arrangement in place with the Taiwan Fair Trading Commission.

Do the relevant enforcement authorities request waivers so as to allow for increased cooperation with authorities in other jurisdictions? What are the consequences of declining to grant a waiver?

The Commerce Act allows the Commerce Commission to provide compulsorily acquired information to any overseas regulators with whom the commission has a cooperation agreement (at present, the Australian Competition and Consumer Commission and the Canadian Competition Bureau) if certain conditions are met. The Commerce Commission can share this information in the absence of consent from the party that provided the information or that is the subject of the information (although those parties must be notified of the information sharing).

If the commission wishes to share voluntarily provided confidential information with an overseas regulator, it will seek a waiver from the party that supplied the information before sharing or discussing it with another agency. If that party declines to grant a waiver, this may be considered by a court in evaluating the degree to which the party has cooperated with the commission's investigation (which may be relevant to any penalty).


How is a cartel investigation resolved? Are settlements, plea bargains or other negotiated resolutions available?

The Commerce Commission has discretion to determine whether to issue court proceedings in relation to alleged cartel conduct. In New Zealand, only the courts have the power to determine whether the Commerce Act has been breached and impose penalties. 

The commission may agree to make submissions to the court jointly with the respondent. This is common when a respondent has cooperated with the commission's investigation and may include making joint submissions to the court on an appropriate penalty.

Agreeing a penalty generally involves the respondent admitting one or more breaches of the Commerce Act and:

  • agreeing with the Commerce Commission a statement of facts and the scope of admissions;
  • agreeing with the Commerce Commission a range for an appropriate penalty; and
  • making a joint submission with the Commerce Commission as to why the penalty range is appropriate.

However, the court must determine whether the penalty is appropriate in the circumstances. The court may impose a penalty which is higher or lower than the penalty range agreed between the commission and the respondent.

A cartel investigation can also be resolved out of court. For example, in some circumstances, the commission may decide not to issue proceedings and instead issue a party with compliance advice or a warning letter.

What is the process for negotiating a settlement, plea bargain or other negotiated resolution? Do such resolutions require court or other approval?

See the above answer.

If a settlement is not reached, what is the procedure for adjudicating a charge of cartel conduct?

The Commerce Commission will issue proceedings against the respondents in the High Court. If the respondents do not admit liability, the matter will go to trial.

Which party must prove its case? What is the relevant standard of proof?

The party alleging cartel conduct (usually the Commerce Commission, but potentially a third party) bears the burden of proof and must prove its case on the balance of probabilities.  

Is there a hearing? If so, what is the process for submitting evidence and testimony?

Yes. Evidence is presented by way of an affidavit and witnesses may be subject to cross-examination. Expert evidence may also be given by way of an affidavit and in person.

What are the accused’s procedural rights?

Documents referred to and used in the preparation of pleadings are disclosed at the outset. Further discovery may be ordered by the court. Respondents have the usual rights to the observance of natural justice and the recognition of privilege.

Appeal process

What is the appeal process?

Appeals against High Court decisions are made to the Court of Appeal. A further appeal to the Supreme Court is available, but only with the leave of that court.

To what extent can the appeal body review the agency’s findings of fact, legal assessment and penalties?

Only a court has the power to find a breach of the Commerce Act and impose penalties. In general, the High Court will decide the facts of the case and whether the conduct breaches the Commerce Act. High Court decisions can be appealed on their merits. Penalties may also be appealed.

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