New Zealand Court Fines Courier Firms After Cartel Investigation

Key Takeaways

• Court Orders Cartel Penalties: Aramex and GoSweetSpot were ordered to pay $724,000 USD ($1.225 million NZD) combined after admitting to cartel conduct in New Zealand’s courier services market.
• Customer Allocation and Price Fixing: Aramex admitted to allocating customers and fixing prices with a competitor, while GoSweetSpot admitted to allocating customers in a separate arrangement.
• Additional Firms Under Scrutiny: Nine other courier businesses are expected to receive warnings for conduct the Commerce Commission believes likely breaches competition law.
• Courier Sector a Regulatory Focus: The freight and courier industry has been the subject of five competition cases in the past 15 years, reflecting ongoing concerns about anti-competitive behavior.

Deep Dive

Two companies operating in New Zealand’s courier market have been ordered to pay a combined $724,000 USD ($1.225 million NZD) after the country’s competition regulator uncovered cartel conduct involving agreements that restricted competition between courier providers.

The penalties, handed down by the Auckland High Court following an investigation by New Zealand’s Commerce Commission, require Aramex to pay $413,000 USD ($700,000 NZD) and GoSweetSpot (GSS) to pay $310,000 USD ($525,000 NZD). The two cases were heard separately and involved different competitors.

Regulators said the arrangements centered on agreements that allocated customers and, in one instance, fixed prices, undermining competition in a sector that plays a critical role in the movement of goods across the country.

Agreements That Restricted Competition

The cases arose from agreements negotiated within reseller and carrier relationships in the courier market, where different business models often interact to deliver services.

Aramex, which operates as a carrier providing courier transportation services, admitted to entering into and giving effect to a contractual arrangement that both allocated customers and fixed prices with another competitor in the market.

GoSweetSpot, which acts as a reseller brokering courier services, separately admitted to arrangements that allocated customers between itself and another competitor.

The companies did not enter into the agreements with each other, but each acknowledged their involvement in conduct that breached New Zealand’s competition rules.

Both matters were resolved through settlements reached with the Commerce Commission before the High Court determined the final penalties.

Courier Sector Under Regulatory Scrutiny

The investigation highlights ongoing scrutiny of the freight and courier industry by New Zealand’s competition regulator, which has pursued multiple cases in the sector over the past decade and a half.

Commerce Commission Chair Dr. John Small said the courier industry occupies a strategically important position in the country’s economy and must remain competitive.

“The courier industry plays a critical strategic role in New Zealand’s economy, given the importance of transport for the movement of goods,” Small said.

He noted that the sector has been a repeated focus for the regulator, “However, the freight and courier sector has been an area of ongoing concern and focus for us, with the Commission taking five court cases in the last 15 years.”

Small said the latest penalties are intended to reinforce expectations around competition in the industry.

“We expect these penalties and warnings to bring about a change of behaviour in the courier sector," he said. “Stamping out cartel conduct is an enforcement priority for the Commission. This outcome sends a strong message that it will not be tolerated.”

More Warnings on the Way

The enforcement action may not end with the two court rulings.

The Commerce Commission said nine additional courier services businesses are expected to receive warnings for conduct the regulator believes likely constitutes cartel behavior under the Commerce Act.

Details about those warnings have not yet been released, though the Commission said more information will appear on its public case register in due course.

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