Auckland construction company MaxBuild Limited and its director have been sentenced in New Zealand's first-ever criminal prosecution for cartel conduct under the Commerce Act 1986, brought by the Commerce Commission. The High Court imposed a $500,000 fine on MaxBuild and sentenced its director to six months of community detention and 200 hours of community service (see Commission’s media release here). 

The charges relate to bid-rigging on two major public infrastructure projects: the Northern Corridor Improvement Project commissioned by the New Zealand Transport Agency and the Middlemore Bridge refurbishment for Auckland Transport. Both MaxBuild and its director pleaded guilty to four charges of price-fixing (through bid-rigging) in relation to the two projects. In delivering the sentence, the Commission’s media release reports that Justice Wilkinson-Smith emphasised the seriousness of the offending, describing it as "striking at the heart of business confidence." Her Honour noted that the conduct involved a "deliberate and concerted strategy" to rig bids for financial gain and, had it not been for mitigating factors, a penalty of approximately $1 million for MaxBuild and two years' imprisonment for its director would have been appropriate.

A second construction company and its director are due to face trial in October 2025 in relation to similar conduct.

The case is a stark reminder that the Commission is prepared to take serious enforcement action against cartel conduct, particularly in relation to bid-rigging. Cartel conduct is an enduring priority for the Commission given the harm it can cause and bid-rigging cartels are a specific enforcement priority for the Commission for 2025 (see our previous alert here). It also underscores the importance of education and awareness about cartel risks within organisations. Companies that fail to invest in effective staff training on cartel conduct and compliance may face criminal penalties, while individuals convicted of criminal cartel offending can face a fine of up to $500,000 and/or up to seven years imprisonment. Given the Commission’s recent announcement that it intends to be a more active enforcer and to overspend its litigation fund, we expect to see increased enforcement in this area.

If you have any questions regarding cartel conduct, need assistance with educating staff, reviewing policies and other compliance processes, or want to understand what this recent penalty decision means for you, please contact one of our competition law experts.