Commission seeks collusion ban

Press, 1 April 1985, Page 33

Commission seeks collusion ban

PA Wellington The Commerce Act should be amended to prevent collusive tendering, the chairman of the Commerce Commission, Mr John CollInge, has said. He was commenting on a Dominion Budget Rent A Car case recently decided by the High Court, in which the Court found that although Hertz and Avis had acted collusively with the object of excluding a third contender from consideration for a booth at Auckland and Christchurch airports, they had not committed the offence of collusive tendering under the Commerce Act.

In the decision, Mr Justice Prichard ruled that as the act stood, the acquisition of booth licences to

operate businesses could not be regarded as the supply of either "goods” or “services.” Mr Collinge said the courts very properly construed strictly words in a statute which created an offence.

“On the other hand, economists and businessmen understood the term ‘services* more widely as the S revision of any right or eneflt which fulfilled some need,” he said. "In that sense, airport authorities did fulfil a service to businesses when providing sphce for restaurants, booths, and shops. Owners of commercial buildings also provided a service in that sense when leasing space.” The Commission said the tendering mechanism was a particu-

larly important option when buying and selling, particularly to the Government and to local authorities. “All those who let tenders should be entitled to expect that tenderers compete, and not collude, when tendering,” Mr Collinge said. Collusive tendering between competitors was regarded by the Commerce Act as a fraud on the consumer and was not in any circumstances able to be Justified as being in the wider public interest For those reasons, Mr Collinge said, it was desirable for the Government to give consideration to amending that provision of the act

Budget Rent A Car is appealing against the High Court decision.