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Commerce Act 1986

Restrictive trade practices - Cartel provisions

31: Exception for collaborative activity

You could also call this:

"Some rules don't apply when people work together on a project, as long as they're not trying to reduce competition."

Illustration for Commerce Act 1986

If you are involved in a collaborative activity with others, some rules may not apply to you. A collaborative activity is when two or more people work together on a project or business venture. This activity must be done in a way that does not mainly aim to reduce competition between the people involved.

When you enter into a contract or agreement with others as part of a collaborative activity, you may be allowed to make cartel provisions. These provisions are allowed if they are reasonably necessary for the collaborative activity. You can find more information about cartel provisions in section 30(1)(a) and section 30(1)(ab).

If a collaborative activity has ended, you may still be allowed to have cartel provisions if they were reasonably necessary for the activity. The activity must have ended for a reason other than to reduce competition between the people involved. You can find more information about this in section 30(1)(b).

The purpose of a collaborative activity can be determined by looking at how the people involved behave or at other relevant circumstances. In general, a collaborative activity is one where people work together and do not mainly try to reduce competition between each other.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM88272.

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Part 2Restrictive trade practices
Cartel provisions

31Exception for collaborative activity

  1. Nothing in section 30(1)(a) applies to a person in relation to a cartel provision if, at the time of entering into or arriving at the contract, arrangement, or understanding that contains the provision,—

  2. the person and 1 or more other parties to the contract, arrangement, or understanding are involved in a collaborative activity; and
    1. the cartel provision is reasonably necessary for the purpose of the collaborative activity.

      1. Nothing in section 30(1)(ab) applies to a person in relation to a cartel provision if, at the time of giving, or requiring the giving of, a covenant that contains the provision,—

      2. the person and 1 or more other parties to the covenant are involved in a collaborative activity; and
        1. the cartel provision is reasonably necessary for the purpose of the collaborative activity.

          1. Nothing in section 30(1)(b) applies to a person in relation to a cartel provision if, at the time of giving effect to the cartel provision,—

          2. the person and 1 or more other parties to the contract, arrangement, understanding, or covenant that contains the provision are involved in a collaborative activity; and
            1. the cartel provision is reasonably necessary for the purpose of the collaborative activity.

              1. Nothing in section 30(1)(b) applies to a person in relation to a cartel provision that constitutes a restraint of trade if—

              2. the person and 1 or more other parties to the contract, arrangement, understanding, or covenant that contains the provision were involved in a collaborative activity that has ended; and
                1. the cartel provision was reasonably necessary for the purpose of the collaborative activity; and
                  1. the collaborative activity did not end because the lessening of competition between any 2 or more parties became its dominant purpose.

                    1. In this Act, collaborative activity means an enterprise, venture, or other activity, in trade, that—

                    2. is carried on in co-operation by 2 or more persons; and
                      1. is not carried on for the dominant purpose of lessening competition between any 2 or more of the parties.

                        1. The purpose referred to in subsection (4)(b) may be inferred from the conduct of any relevant person or from any other relevant circumstance.

                        Notes
                        • Section 31: replaced, on , by section 8 of the Commerce (Cartels and Other Matters) Amendment Act 2017 (2017 No 40).
                        • Section 31(1): amended, on , by section 6(1) of the Commerce (Criminalisation of Cartels) Amendment Act 2019 (2019 No 9).
                        • Section 31(1A) heading: inserted, on , by section 16(1) of the Commerce Amendment Act 2022 (2022 No 11).
                        • Section 31(1A): inserted, on , by section 16(1) of the Commerce Amendment Act 2022 (2022 No 11).
                        • Section 31(2): amended, on , by section 6(2) of the Commerce (Criminalisation of Cartels) Amendment Act 2019 (2019 No 9).
                        • Section 31(2)(a): amended, on , by section 16(2) of the Commerce Amendment Act 2022 (2022 No 11).
                        • Section 31(3): amended, on , by section 6(3) of the Commerce (Criminalisation of Cartels) Amendment Act 2019 (2019 No 9).
                        • Section 31(3)(a): amended, on , by section 16(3) of the Commerce Amendment Act 2022 (2022 No 11).
                        • Section 31(3)(a): amended, on , by section 19 of the Commerce Amendment Act 2018 (2018 No 42).