21 Jul 2021

Commerce Commission takes Moola to High Court

5:31 pm on 21 July 2021

The Commerce Commission has filed High Court proceedings against a consumer finance company for engaging in cartel conduct.

New Zealand dollars

Moola's alleged breach of the Commerce Act pre-dates the changes that were made to the law. Photo: 123RF

The regulator alleged that Moola reached an agreement with some rivals to not compete for the same ad space on Google.

"The Commission also alleges agreements were reached that the companies would negatively match certain keywords," it said.

Negatively matching key works prevents certain ads from being triggered by a certain word or phrase, which stops them from being displayed.

"This means that consumers searching for a consumer loan provider on Google may not see ads for other loan providers," the Commission said.

The watchdog claimed these agreements allowed Moola to fix how much it paid for its online ads, and restricted the ability of its competitors to purchase space through Google Ads.

"As a result, the Commission alleges, entering into and giving effect to the agreements breached the Commerce Act."

The Commission was not seeking a financial penalty and was instead after a declaration from Moola that it engaged in anti-competitive behaviour.

Moola provides high-cost short term loans of up to $5000 to consumers.

It operates through the moola.co.nz and needcashtoday.co.nz websites.

Earlier this year, new laws came into effect that made being part of a commercial cartel a criminal offence.

It meant individuals who are convicted could face a several-year jail sentence or a $500,000 fine.

However, Moola's alleged breach pre-dates the changes that were made to the law.

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