On 29 June 2018 the New Zealand Commerce Commission (NZCC) published amended cartel leniency policy guidelines, updating its previous guidelines from 2011. While the changes are mostly cosmetic, the updated guidelines indicate a potential change in the NZCC's approach towards penalty discounts for second-in applicants that seek to fall within the NZCC's cooperation regime.

NZCC's cartel leniency policy

The NZCC's cartel leniency policy regime grants immunity from prosecution to the first participant in a cartel to inform the NZCC of its existence in exchange for full cooperation with the NZCC.

In addition, for those participants which are not the first to inform the NZCC of a cartel, the NZCC will provide cooperation concessions if they cooperate fully with the NZCC and provide it with "information that adds significant value to the investigation".

Changes to updated guidelines

The NZCC's updated guidelines do not introduce substantive changes to the NZCC's 2011 guidelines, but rather reflect its efforts to make the guidelines more user friendly – including by clarifying what is expected of parties through the NZCC's immunity or cooperation processes.

There are, however, a couple of changes to the NZCC's process:

  • As a rule, the 2011 guidelines provided an applicant with 28 working days from first requesting immunity (ie, obtaining a marker) to prepare and submit to the NZCC an initial statement (known as the proffer) outlining a description of:
    • the cartel conduct;
    • the key individuals; and
    • the key parties.

Recognising that 28 working days was often a short timeframe to conduct the necessary internal investigations to prepare that proffer statement, the NZCC has increased the standard timeframe to 40 working days. The NZCC will allow a longer timeframe if it agrees that it is appropriate in the circumstances.

  • The 2011 guidelines said that the NZCC "may consider recommending" reductions in penalties of between 25% to 50% for parties that do not receive immunity but that fall within the NZCC's cooperation regime. However, indicating a move away from any form of penalty reduction commitment, the NZCC's updated guidelines say that the "courts have typically recognised cooperation discounts of 25-50%, but this indication should not be treated as a commitment by the Commission in any specific case". This is a potentially unhelpful change. In particular, the move away from providing any specific indication of a likely discount reduction may discourage participants from using the NZCC's cooperation regime, as it increases the uncertainty about whether the NZCC will ultimately reward cooperation by supporting sufficiently material penalty discounts.

The NZCC's updated guidelines can be accessed here, and a shorter FAQ document can be accessed here.

For further information on this topic please contact Sarah Keene or Troy Pilkington at Russell McVeagh by telephone (+64 9 367 8000) or email (sarah.keene@russellmcveagh.com or troy.pilkington@russellmcveagh.com). The Russell McVeagh website can be accessed at www.russellmcveagh.co.nz.

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