New Zealand / Business

Adult advertising website accused of anti-competitive behaviour

10:00 am on 3 August 2018

Sex workers are calling on the Commerce Commission to investigate the sex worker online advertising business.

Photo: RNZ/Rebekah Parsons-King

Online escort directories are the main way sex workers advertise their services, and one, NZ Girls, is being accused of anti-competitive behaviour.

Adult advertising website NZ Pleasures says NZ Girls holds about 90 percent of the market and abuses its market power by not letting its customers advertise on other sites.

NZ Pleasures director, Sharon, said NZ Girls had probably breached Section 36 of the Commerce Act.

She has started an online petition to gauge how much support was out there for an investigation to get underway.

Steve Crow who operates another directory, Girl 4U, has taken the same complaint to the Commission before, he said.

Mr Crow said NZ Girls' behaviour was definitely anti-competitive.

"Anyone who appears on another site will get a phone call probably within 10 or 15 minutes to say, 'Hey you need to take your profile down or you'll be bumped to the bottom of the site, you'll be permanently banned, or instead of paying $100 a week you'll be paying $150, $200 or $300 a week'. "

He said there was no way NZ Girls would insist on exclusive advertising if it did not have a dominance in the market and was doing so because it could get away with it.

"I've had lots of talks with them but they're incredibly arrogant. They're just basically, 'that's the way it is, those are rules and the girls can take it or leave it'. "

Several complaints have been made to the Commission about NZ Girls over the last 10 years. NZ Pleasures' most recent complaint was not looked into, with the Commission saying it did not believe NZ Girls had a substantial degree of market power.

Mr Crow, who has been involved in the industry for 25 years, said the complaints had not been taken seriously. "At the end of the day it's an adult industry and it's politically a hot potato for anyone to start getting involved with messing around in the adult industry."

Sharon said it was worth another shot and said she was hopeful a thorough investigation would be done.

"It's important now that they actually stand up and say, 'This is an industry within NZ, it's now decriminalised, it should be recognised.'

"I don't think that they've been looking at it as seriously as they should be."

Barrister John Land, who specialises in competition law, said there were three tests to check whether Section 36 had been breached: whether someone had a substantial degree of power; if they took advantage of their market power; and if they were acting in an anti-competitive way.

Dame Catherine Healy from the New Zealand Prostitutes Collective said it encouraged sex workers to advertise through as many avenues as possible.

"I think it's important that sex workers have parallel advertisements, because a business can withdraw and that would be a tremendous disruption.

"We've seen that happen with Cracker when it had to withdraw overnight."

Cracker, used by New Zealand escorts, was one of many subsidiary sites off Backpage.com, a site shut down by US authorities in April.

"Quite a number of sex workers were displaced and they didn't have a back-up plan, so it's really important there's a multitude of players," said Dame Catherine.

NZ Girls did not respond to RNZ's request for an interview.