The Commerce Commission has publicly confirmed that it filed charges in 2021 against three former employees of a company for the destruction of material requested by the Commission during an investigation into potential anti-competitive conduct. The charges highlight the personal consequences that can follow when individuals attempt to obstruct a Commission investigation. Although the conduct occurred in 2020, the Commission has only recently been able to report on the matter following the lifting of name suppression.

What did the charges relate to?

The charges stemmed from the employees’ response to a statutory notice served on their employer by the Commerce Commission. The notice, issued under s 98 of the Commerce Act 1986, required the company to provide the Commission with documents recording communications between various persons. The Commission’s media release reports that when the Commission queried the omission of instant messages from the company’s response to the notice, a senior manager at the company instructed two staff members to delete any instant messages that might be considered “an issue” and those staff members deleted various WhatsApp messages with customers. The Commission was alerted to the conduct by a whistleblower.

The senior manager was charged—and pleaded guilty to—a charge under the Crimes Act 1961 for wilfully attempting to obstruct the course of justice. The two staff members were each charged—and pleaded guilty to—failing to comply with a statutory notice under the Commerce Act. All three employees were ultimately granted discharges without conviction at sentencing as a result of their individual circumstances.

What are the key takeaways?

This case is a timely reminder of the serious consequences that can arise from failing to comply with a formal notice issued by the Commerce Commission. The Chair of the Commission, Dr John Small, has warned that the Commission takes the use of its powers seriously and it will take action against parties who attempt to obstruct its investigations.

Key takeaways include:

• Statutory notices must be taken seriously: A formal notice by the Commerce Commission to produce documents and provide information under section 98 of the Commerce Act (and similar notices under s 47G of the Fair Trading Act, s 113 of the Credit Contracts and Consumer Finance Act 2003 and s 182 of the Grocery Industry Competition Act 2023) imposes a legal obligation on the recipient to provide full and accurate information. Attempting to withhold or destroy relevant material can result in criminal charges.
• Individuals can face personal liability: Employees, not just companies, may be prosecuted if they obstruct a Commission investigation or fail to comply with a statutory notice. The burden of responding to a criminal prosecution – including the time, legal costs and reputational harm – can be significant even where a conviction is avoided.
• Organisational culture and training matter: Businesses should ensure employees are properly trained on how to respond to regulatory investigations and understand the consequences of non-compliance.

Businesses and their employees must also ensure that any information provided to the Commission (whether informally or in response to an information request) is complete, truthful and accurate as it is a criminal offence to mislead or deceive the Commission.

If you have any questions about responding to regulatory investigations or would like guidance on compliance strategies, our regulatory experts are here to help. We have extensive experience advising clients through complex regulatory matters and investigations by New Zealand’s key enforcement agencies. See our previous alert here for 12 guiding principles for navigating regulatory investigations with confidence.