38 | MEMBER SERVICES UPDATE
Post-convention legal wrap up What do a Columbian drug smuggler, doctor’s records and a snake all have in common? Our legal sessions at Convention lifted the lid on legal and provided the answers.
UNLAWFUL CARTEL CONDUCT? First “Out of the Box” on day one of the convention, Darryl King of Jackson Russell Lawyers New Zealand dispelled the myth that cartel laws in new Zealand only apply to Columbian drug smugglers. So what exactly is unlawful cartel conduct? Most people think of Cartels as only affecting “big, bad” business (and Columbian drug smugglers!) but this is wrong! Cartel laws do not discriminate between large, well-resourced corporate entities and small “mum and dad” businesses. Cartel laws affect any company that enters into an agreement or arrangement with a competitor. Which potentially includes suppliers of goods and services, resellers, joint venture parties and franchises – and of course self storage facilities. The question is, do you have a cartel provision? Cartel laws prohibit arrangements with competitors that the purpose, effect or likely effect of is: Price fixing: controlling the price (or any related element of price) at which one or both parties buy or sell goods/
services from or to others. (i.e. – How much you are selling/buying for). Market allocating: allocating or restricting the customers, channels, geographic areas etc. each party can sell to or buy from. (i.e. who you are selling to/buying from) Output restrictions: preventing, restricting or limiting production, supply, and the capacity to supply or the purchase of goods/services. Some Cartel risk areas for self storage facilities are shown in the table below.
What do you need to think about as members of the SSAA? During association meetings (formal or otherwise), be aware that you cannot discuss with competitors: l pricing or fees; l customers or territories; and l services and goods you provide. Take care of gathering or sharing information. Be careful sharing information about your business plans. Seek legal advice in NZ if potential competition issues arise.
DOCTOR, DOCTOR, WHY AM I STILL HOLDING YOUR RECORDS? The next Convention presentation was from SSAA Australian lawyers, Mr Tony Raunic and Mr Graeme Armstead of Hunt & Hunt addressed a common issue for Australian members of what happens when you are left holding sensitive medical, legal or accounting records. The following steps were recommended: 1. Notify the relevant governing body in your state or territory, preferably by letter as it puts the body more on notice and reduces the likelihood of a dismissive response; 2. Request that the governing body either collect the records, accept delivery of the records or meet the facility’s cost of secure destruction through a contractor service. If a governing body is initially unhelpful, it may well be useful in engaging a lawyer to make direct contact. Even by telephone to the CEO, raising the prospect of negative publicity for the
ACTIVITY/AREA LIKELY TO BREACH CARTEL LAWS
POTENTIAL ISSUE
Agreeing with competing facilities standard pricing for storage
Price fixing
Staff (or owners) discussing pricing, promotions, market allocation or output etc. with competitors
Price fixing / Market allocation / Output restriction
Joint marketing with competing facilities
Price fixing / Market allocation / Output restriction
Allocating areas/suppliers/customers/channels/potential customers between competing businesses
Market allocation
Two competing facilities collectively negotiate with a supplier to purchase a container full of goods to save on international shipping costs of sending two partly empty containers
Price fixing (buy side)
Be alert to restrictive deals with suppliers who are also competitors – some corporate groups have many parts
Price fixing/market allocation / output restriction
Agreeing with competing facilities promotions and/or when they are being run by you/them
Price fixing / Market allocation / Output restriction
Agreeing with other facilities restrictions on the goods and services available from you or their business
Output restriction
Supply agreements you enter into that may have a cartel clause. Suppliers should not (generally) be seeking to fix: • Your resale prices • Where or who you can sell goods or services • Limiting your ability to sell competing goods
Price fixing / Market allocation / Output restriction
INSIDER 109 OCTOBER / NOVEMBER 2019
www.selfstorage.org.au
