Price fixing costs Giltrap dearly

By Phil Boeyen, ShareChat Business News Editor

Thursday 7th February 2002

Auckland car company Giltrap City Toyota has been ordered to pay a $150,000 penalty for price fixing in breach of the Commerce Act.

The Commerce Commission says the order from the Auckland High Court comes almost eight years after Giltrap City Toyota entered into a price fixing agreement with other Auckland Toyota dealers in June 1993.

In December 1996, seven Auckland Toyota dealers admitted breaching the Act following a Commerce Commission investigation. They were each ordered to pay penalties of $50,000.

Giltrap City Toyota did not admit any breach and elected to defend the Commission's prosecution.

Commission chairman, John Belgrave, says the Commission is very pleased with the penalty imposed.

"The judgement emphasises that price fixing agreements are one of the most serious type of anti-competitive conduct prohibited by the Commerce Act.

"Price fixing lessens competition in the most fundamental way - it prevents consumer choice by influencing prices. Businesses must realise that price fixing covers all parts of a price, not just the final retail price."

Justice Glazebrook said that a price fixing arrangement is deemed to lessen competition substantially as, by its very nature, it weakens the natural competitiveness that one would otherwise have expected to find between parties to it.

"Deterrence is an important object when fixing penalty under the Act. Deterrence is not just a question of deterrence of the party that has contravened, but more importantly deterrence of the commercial community in general."

Giltrap City Toyota has appealed the High Court ruling to the Court of Appeal.

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