Two courier companies have been ordered to pay more than $1.2 million in penalties after a Commerce Commission investigation found they engaged in cartel conduct in New Zealand’s freight and courier sector.

The High Court in Auckland fined courier company Aramex $700,000 and courier reseller GoSweetSpot $525,000 following separate hearings.

The companies admitted entering into agreements with competitors that included cartel provisions.

The Commerce Commission said the two cases were unrelated and the companies did not enter into the arrangements with each other.

Chair Dr John Small said the outcome sent a clear signal to the industry.

“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.

“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.

“We expect these penalties and warnings to bring about a change of behaviour in the courier sector.”

Aramex admitted entering into and carrying out a contractual arrangement that allocated customers and fixed prices between itself and another competitor in the courier services market.

Separately, GoSweetSpot admitted entering into and carrying out contractual arrangements that allocated customers between itself and another competitor.

Small said cartel behaviour undermined fair competition and ultimately harmed consumers.

“Stamping out cartel conduct is an enforcement priority for the Commission. This outcome sends a strong message that it will not be tolerated,” he said.

“Companies engaging in cartel conduct should expect to be on the receiving end of enforcement action.”

In addition to the court penalties, the Commerce Commission said nine other courier service businesses will soon receive warnings for conduct it believes likely breaches the Commerce Act.

The Commission said it was unable to comment further on those warnings at this stage.

Aramex operates as a carrier providing courier transport services, while GoSweetSpot acts as a reseller, brokering courier services between customers and transport providers.

Both cases involved agreements negotiated as part of reseller and carrier relationships within the courier sector.

Cartel conduct, which includes price fixing, market sharing or allocating customers, is illegal under the Commerce Act. Since April 2021, cartel behaviour can also carry criminal penalties of up to 7 years’ imprisonment.