In this article, we discuss the criminal charges against Noel Leeming and give a general update on other recent Commerce Commission activity.

Commission issues proceedings against Noel Leeming

The Commerce Commission (Commission) filed criminal proceedings against Noel Leeming, which is owned by The Warehouse Group, for a range of activities it alleges were false or misleading, in breach of the Fair Trading Act 1986 (FTA). 

In its media release, the Commission noted that Noel Leeming has historically been one of its most complained about traders. The Commission’s deputy chair, Anne Callinan, stated that “[p]rice match advertising gives the impression that customers will be able to show up and get a match for competitor’s prices. It’s crucial that businesses promoting any price match offer factor in the overall impression of the claims they make, and that all information is clear to customers.” Ms Callinan went on to say: “[w]e expect big businesses to be clear and honest in their advertising. Consumers should be able to trust the information they receive when they are buying goods and services.”

This is not the first time the Commission has taken action against Noel Leeming. In 2018, Noel Leeming was fined $200,000 under the FTA, following an investigation by the Commission into similar conduct regarding customers’ rights under the CGA. In 2020, it was also warned by the Commission for making representations that it could supply certain products it did not have reasonable grounds to make at the time, and accepting payment for those products.

However, Noel Leeming’s chief operating officer expressed “bafflement” at the Commission’s decision to file charges, maintaining that its price matching practices are fair and are widely used across the industry, and emphasising the company’s intention to defend its position. 

Many parties subject to Commission-issued court proceedings for breaches of the FTA reach agreement with the Commission on an agreed (discounted) fine in exchange for admitting liability ahead of a substantive hearing. If that does not happen in this case, we will be watching the substantive hearing with interest.

Charges against two PAK’nSAVE supermarkets

In two recent FYIs (available here and here) we discussed charges filed by the Commission under the FTA against Woolworths New Zealand, and the operators of two PAK’nSAVE supermarkets in Silverdale in Auckland, and Mill Street in Hamilton. The charges relate to pricing and promotional conduct / representations by both supermarkets. 

At a recent hearing in the Auckland District Court, both PAK’nSAVE supermarket operators pleaded guilty to all charges, with PAK’nSAVE Mill Street facing eight charges, and PAK’nSAVE Silverdale facing ten. As a reminder, companies in breach of the FTA are liable to a maximum penalty of $600,000 per offence (although there can be more than one offence from a breach). Sentencing is scheduled for 4 November, with submissions by the Commission and the supermarkets due in October. 

Woolworths has yet to appear in the District Court in relation to the charges against it.

Debt collector fined for misleading conduct

To round out the wave of recent FTA claims brought by the Commission, it has successfully obtained judgment against Law Debt Collection (LDC) and its director, for breaches of the FTA in relation to misleading representations made by LDC’s employees. As a debt recovery business, LDC was found to have misled debtors about possible consequences of failing to pay, including what LDC’s employees might do to debtors who did not pay. 

LDC and its director are required to pay $115,500 in fines and emotional harm reparations, recognising the often-vulnerable consumers that debt recovery businesses will engage with.

Commission updates investigation guidelines

In what was not widely publicised, the Commission has updated its public investigation guidelines (Guidelines) for the first time since 2018. The Guidelines seek to inform the public about the Commission’s investigative process across its various mandates in its competition, consumer, and regulatory portfolios. This includes its process, interviews, information requests, and its handling of information obtained during investigations.

At a high level, the updates are relatively uncontroversial, generally clarifying the status quo, as well as providing an update for some recent new enforcement responsibilities (such as under the Grocery Industry Competition Act 2023) which the Commission did not have when the previous version of the Guidelines were published. 

That said, there is one key change the Commission is proposing that is worth highlighting, which relates to its use of the public case register on its website.

While the Commission’s case register has historically provided details of public merger or authorisation applications, public enforcement actions and certain public investigations (such as for market studies), the Commission now intends to publish basic details of every investigation across its portfolios, including the party (or parties) under investigation, the relevant industry, and the relevant provision(s) of the Act under consideration.

This represents a significant shift in the Commission’s approach. Parties under investigation have previously been able to engage with the Commission on the basis that the public would not be informed of an investigation against them unless further enforcement action was to be taken. This new process will publicise details of all investigations (unless there is a particular reason not to), regardless of whether the Commission decides to take further action. 

We expect there will be some opposition to this change from parties currently under investigation, as well as those parties that may commonly engage with the Commission in the investigatory space.

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