People of the same trade seldom meet together ... but the conversation ends in a conspiracy

If New Zealand's largest street gangs were to ever think about merging forces, it isn't the police they need to worry about. It's those bad hombres at the Commerce Commission ... .

[Ed's note: In December of 2018, this Stuff article appeared. Due to a mix of technical glitches and summer slackness, we're only just now posting Prof Ahdar's wry and satirical take on it. We apologise to our loyal reader(s) for the delay in service.]

The Mongrel Mob and Black Power may yet be investigated by the Commerce Commission for anti-competitive conduct, speculated Professor of Competition Law at Otago University, Rex Ahdar.

The chairman of the Commission, Dr Mark Berry, could not be reached for comment, but Ahdar ventured: “Based on their public statements they might be vulnerable to challenge from the Commerce Commission for various potential violations of the Commerce Act 1986.

Public utterances by their leaders (who possess real or at least ostensible authority) that they might form a “pact” appear to constitute an invitation to collude and form a “cartel” in terms of s 30 of the Commerce Act.  Specifically, it might be an attempt to divide up the market pursuant to s 30A(4).  If they sought a clearance from the Commerce Commission it would be most unlikely one would be granted under s 65A."

Police Association President Chris Cahill commented: “They still make money selling drugs, doing standover tactics and bringing pain into those communities, but the fact they’re talking about getting together shows how competitive those markets are getting...”

Yes Rodney, extortion, prostitution and drug dealing are one thing, but nobody likes a cartel.

If the pact constituted collusion (“a contract, arrangement or understanding”) then the two gangs’ individual market shares would be combined and this entity would likely possess “a substantial degree of market power”. That being so it would be potentially breach s 36(2)

A person [Mongrel Mob/ Black Power] that has a substantial degree of power in a market must not take advantage of that power for the purpose of—

(a) restricting the entry of a person [Australian gang] into that or any other market; or

(b) preventing or deterring a person [Australian gang] from engaging in competitive conduct in that or any other market…

A full-blown amalgamation of their chapters and plant may constitute an anticompetitive merger in terms of s 47, which bans acquisitions of assets that may result in a substantial lessening of competition in a market. It is doubtful that the merger would fall with the ‘safe harbours’ set forth in the Mergers and Acquisitions Guidelines 2013 (which designate prima facie permissible post-merger market concentration levels.)

Much depends on the perennially tricky definition of the relevant “market”. Perhaps it could be defined here as the market for organised crime or a narrow ‘submarket’ such as the market for indigenous ethnic quasi-criminal associations.

The ‘firms’ could of course apply to the Commission for an authorisation (s 67), but it is difficult to see what, by way of “public benefits”, they could proffer. The notion of “benefit to the public” goes beyond purely efficiency gains to include non-economic matters (as the Court of Appeal affirmed in NZME Ltd v Commerce Commission [2018] NZCA 389), yet the gangs are not, for example, non-profit organisations engaged in charitable work, reducing pollution nor an endangered species requiring preservation.

Mind you, there is the preservation of human life. Mr Sonny Fatu, President of the Waikato Mongrel Mob, believes if the Mongrel Mob and Black Power don’t reach a pact, brazen public killings such as in Australia could be on the cards for New Zealand.

“When there is dysfunction—whether it be a dysfunctional family, a dysfunctional workplace, even a dysfunctional gang—there is no order. There is no direction, there are no codes. It’s hard to keep a tidy house”.

An no one likes a messy house, do they?

If the Commerce Commission are not minded to intervene (being embroiled in a year-long investigation to establish the obvious that oligopolistic oil companies are engaged in tacit collusion to set prices) a private antitrust action can be brought by an aggrieved competitor or a new entrant. The more geeky associates of putative trans-Tasman newcomers—the Rebels, Comancheros, and Bandidos—are busy clicking links to “Commerce Act 1986”.

In the end, the thing that really breaks hardened patched members into a cold sweat in the wee hours of the night is not greater police surveillance, longer sentences or stricter prison condition, but the prospect of good old-fashioned robust competition.