The nations of the Five Eyes alliance have stepped up efforts to prevent anti-competitive conduct in the supply and distribution of goods with a new partnership between Australian competition watchdog the ACCC, the US Department of Justice and Federal Bureau of Investigation (FBI), Canadian Competition Bureau, NZ Commerce Commission and UK Competition and Markets Authority.
The competition authorities will focus on illegal conduct, including collusion, in global supply chains, in light of the pandemic-induced disruptions that have led to much higher freight rates and more expensive goods for consumers.
After an explosion in shipping costs, sign and print media supplier Spandex Asia Pacific this month lifted prices on most of its products by between 6% and 10% - joining local suppliers including Graphic Art Mart, Amari, Starleaton and Spicers.
Freight rates on key global trade routes are currently about seven times higher than they were two years ago, according to the ACCC.
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| "Ready to act": ACCC chair Rod Sims |
“COVID-19 has caused the supply chain disruptions the world is currently experiencing, but the purpose of this working group is to detect any attempts by businesses to use these conditions as a cover to work together and fix prices,” said ACCC chair Rod Sims.
“We will be sharing intelligence to identify any behaviour that restricts or distorts competition, and companies are now on notice that the ACCC and its international counterparts will be ready to act.
“Australia is an open, trade-exposed economy, and like the other international agencies in this working group, we have a very strong interest in preserving strong competitive markets for global trade.”
Types of anti-competitive conduct the working group will be watching for include cartels and any other activities that materially impact competition, such as exclusionary arrangements by firms with market power.
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| "Zero-tolerance for unscrupulous businesses": NZCC chair Anna Rawlings |
NZ Commerce Commission chair Anna Rawlings said: “We recognise that Covid-related supply chain issues have created significant challenges for economies worldwide, and here in New Zealand we’ve seen businesses respond by cooperating responsibly to ensure New Zealanders continue to be supplied with essential goods and services.
“However, we still have zero-tolerance for unscrupulous businesses using Covid as an opportunity for cartel conduct, such as non-essential collusion between competitors or anti-competitive behaviour. The international working group will strengthen our continued efforts to deter and penalise cartel conduct.
“In addition to financial penalties, since April 2021, individuals involved in cartel conduct can be liable for a term of imprisonment of up to 7 years so it is more important than ever that businesses, their directors and employees make sure they understand how to stay on the right side of the law.”
The new working group complements a number of existing formal and informal cooperation agreements with competition agencies in the US, UK, Canada and NZ, designed to improve the effectiveness and efficiency of competition investigations that span multiple jurisdictions.
The nations of the Five Eyes alliance have separate intelligence sharing arrangements between security agencies.
