The owner of an Auckland firm has complained to the Commerce Commission about the rubbish removal company, Waste Management.
He has an issue with its contract, which he claims you can never get out of. It was a problem he discovered as his three-year contract came to an end.
John Sullivan's company Skycom is one the largest two-way radio dealers in the country.
He's been in the business for 17-years and has a team of staff around the country, with 23 based in Auckland.
He's been using Waste Management skips to take away his company's rubbish and his contract with the company ends this month.
So he's started looking for another waste removal company.
"We found another competitor that was giving us better pricing than we had been paying and we wanted to consider going to them, so we gave 60 days' notice in accordance with the contract we had with Waste Management that we wanted to terminate."
That's where Mr Sullivan ran into trouble. There's a specific clause in his Waste Management contract, a clause which makes the contract never ending.
The clause says he can't go to a competing firm unless he's given Waste Management the opportunity to match the lower price.
"Unless it has in good faith given the contractor all reasonable opportunity to match the pricing and other service conditions which the competitor has offered to the Customer," clause 23 of the Waste Management General Conditions of Agreement reads.
"We're forced within the terms of the contract we signed three years ago to give that quote back to Waste Management, at which point they can match it," Mr Sullivan says.
But here's where his Sullivan's problem starts -- Waste Management can match the price, but there's nothing to stop it raising its fees again 21 days later.
Competition lawyer John Land says the clause could be seen as a barrier to competition.
"The clause is a disincentive to customers being able to change to another competitor," he says.
It's the Commerce Commission's job to monitor anti-competitive behaviour, and Mr Sullivan has filed a complaint with them.
"The Commerce Commission would certainly have grounds to investigate the issue of whether this clause might give rise to be in breach of the Commerce Act," Mr Land says.
"What the outcome of that investigation would be would depend on a number of factors."
Newshub approached Waste Management for comment on seven occasions. The firm has not responded to our requests for either an interview, or a written statement.
Newshub.
