Ronovation Ltd, which trades as Ronovationz, agreed to the penalty as part of the settlement negotiations in proceedings that were filed back in July.

The proceedings were initiated by the Commerce Commission which alleged that rules developed and used by the company between 2011 and 2018 amounted to cartel conduct in breach of the Commerce Act.

The rules were intended to prevent Ronovationz members from competing for properties against each other, but the Commission said they had the effect of price fixing and bid rigging.

Shortly after the Commission launched proceedings, the company admitted the wrongdoing and in a penalty hearing agreed to pay the Commission the recommended fine of $400,000 for the behaviour.

In her judgment, Justice Sarah Katz said Ronovationz’s rules were deliberately anticompetitive and designed to suppress competition between members in a manner that was to the detriment of vendors.

But she also noted there was no evidence that Ron Hoy Fong, or Ronovationz members, realised that the conduct breached New Zealand’s competition laws.

“Publication of the case, and the penalty imposed, will likely lead to greater public awareness of the unlawfulness of anticompetitive buyer side conduct of this nature, and the serious consequences that can result from engaging in such conduct.”

This is important as price fixing will become a criminal offence from April 2021.

Ron Hoy Fong, as the director of Ronovationz, has accepted responsibility for the breach.

The company earlier said it did not know its conduct was in breach of the Act until the Commission wrote to it in 2018. Once it became aware of the Commission’s concerns, it revoked the rules and ceased the conduct.