Cleaning business fined $51k for long-running cartel arrangement

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Photo: RNZ / Nate McKinnon

The High Court has penalised a commercial cleaning company $51,000 for engaging in cartel conduct.

The Commerce Commission filed proceedings against Canterbury Industrial Scrubbing in April, alleging the company and an unnamed competitor ran a cartel scheme for nearly two decades.

The scheme meant CI Scrubbing and its rival company would not compete with each other, with CI Scrubbing offering industrial scrubbing services, and the other offering sweeping services.

The agreement eventually broke down.

The commission said when the other firm tried to exit the scheme, CI Scrubbing’s director, Daniel Jamieson, threatened to target its customer base.

The High Court in Christchurch said it could have imposed a penalty of up to $1.25 million, were it not for the defendant’s financial circumstances.

Justice Rachel Dunningham found the long duration of the scheme was a “clear aggravating factor” and the use of commercial threats amounted to a “serious breach” of law.

She imposed a final penalty of $51,000 on CI Scrubbing and made declarations against Jamieson.

The commission welcomed the High Court’s findings.

It said after the cartel broke down, some customers of industrial scrubbing and sweeping services saw prices dropping by up to 30 percent.

The country’s first-ever criminal prosecution for cartel conduct is currently before the High Court, after the commission filed criminal charges against two construction companies and two directors for allegedly rigging bids of publicly funded construction contracts.

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