Several developments demonstrate that it is timely for firms operating in the construction sector to revisit their competition law compliance, particularly in relation to cartel conduct:
- On 3 September 2025, a second construction firm pleaded guilty in the Auckland High Court in New Zealand’s first criminal cartel prosecution. This follows the other alleged cartel member, MaxBuild Limited (and its director), pleading guilty in late 2024 for bid rigging in relation to NZTA and Auckland Transport contracts.
- In its 2025/2026 enforcement and compliance priorities the Commerce Commission (NZCC) has reaffirmed its focus on cartel conduct in the procurement of infrastructure and public services.
- The NZCC's enforcement scrutiny coincides with the Government's focus on growing the infrastructure pipeline, with $6 billion of infrastructure projects expected to commence between July and December 2025. As activity levels and construction opportunities increase – in part, driven by the Government's support for infrastructure growth, amendments to the foreign investment settings and lower interest rates – sector participants must remain vigilant in meeting their competition law obligations.
Proactive compliance, including robust internal policies, regular training to staff and legal support, is essential to avoid costly enforcement action and reputational harm.
Here are five key reminders to help mitigate competition law risk, particularly in relation to cartel conduct:
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- Cartel conduct is illegal and can result in criminal prosecution. It is unlawful for competitors to agree to fix prices, restrict output or allocate markets. Informal or verbal understandings, including the sharing of competitively sensitive information with competitors, can result in significant fines for companies and individuals, as well as director disqualification and potential imprisonment.
- Information sharing can be risky. Discussions with competitors about competitively sensitive information (which can include price lists, bidding strategies, forecasts, costs, margins and other strategic information) can be inferred to be evidence of cartel conduct.
- Know the difference between competing and collaborating. In the construction sector, it is common for firms to be competing for projects one day and collaborating the next – whether as joint venture partners, consortium members or as part of an alliance. When collaborating, firms must ensure that one of the exceptions to the cartel prohibition applies.
- Spotlight on bid rigging. Taking enforcement action against bid rigging remains a priority for the NZCC. Bid rigging can include "cover bidding" (inflating bids to favour a pre-determined winner), "bid rotation" (taking turns to win) and "bid suppression" (withholding bids to steer outcomes). When conducting a joint bid, parties should ensure that one of the exceptions apply, and that they only share information as necessary for the collaboration, compete vigorously outside of the joint bid and document the arrangement clearly from the outset to demonstrate awareness of their legal obligations.
- Cartel conduct can arise at any level of the supply chain. Firms in the construction sector need to ensure competition law compliance at all levels of the supply chain, not just when dealing directly with end consumers.