Landlords could face jail if they form rent cartels

PHOTO: There’s already evidence of landlords following through on threats to pull out of the industry

Landlords teaming up to raise rents en masse in response to the new tax rules could potentially end up behind bars.

A new law in effect from Thursday criminalises cartels, with anyone convicted facing up to seven years behind bars.

“Cartel conduct harms consumers through higher prices or reduced quality, and it harms other businesses which are trying to compete fairly,” said Commerce Commission chair Anna Rawlings.

“The introduction of possible imprisonment for cartel conduct underlines just how serious and harmful this offending is.”

The jail terms possible under the Commerce (Criminalisation of Cartels) Amendment Act 2019 come on top of “already significant” financial penalties – $500,000 for an individual, and either $10 million, three times commercial gain or 10 percent of turnover per year per breach for companies.

“Now more than ever, businesses and their staff need to make sure they understand the kind of commercial arrangements they should avoid to stay on the right side of cartel laws,” said Rawlings.