Competition Alert – 27 June 2017

Home Insights Competition Alert – 27 June 2017

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Contributed by: Troy Pilkington, Sarah Keene and Hannah Loke

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Published on: June 27, 2017


New powers for the Commerce Commission announced

The Commerce and Consumer Affairs Minister Jacqui Dean today announced that the Government is recommending changes to the Commerce Act.

Those changes include:

  • Providing the Commerce Commission with powers to undertake market studies. That would mean the Minister could choose to proactively task the Commission to examine markets where there are concerns competition is acting sub-optimally, rather than it acting only where there are allegations/suspicions of breaches of the Commerce Act. Russell McVeagh has previously submitted against the introduction of market studies given overseas experience demonstrates that the costs to businesses of such studies are significant, and such studies often do not deliver any tangible benefits to competition, consumers, or industry.
  • Allowing Commerce Commission settlements to be registered as court enforceable undertakings, so that the Commission can litigate breaches of those undertakings without needing to prove that a breach of the Commerce Act has arisen. In principle Russell McVeagh is supportive of more flexible enforcement tools for the Commission, however, it is important that appropriate checks and balances on the Commission's discretion are implemented.
  • Repeal of the Commerce Commission's “cease and desist” regime, which was intended to be an alternative to the Commission seeking interim injunctions. That regime had, however, only been used once since it was introduced in 2001.

In relation to the review of the existing market power prohibition, the Minister announced that consultation to date has not revealed that an alternative test would be beneficial to competition and consumers. Accordingly, officials will continue to review the market power regime, and report back in mid-2018. 

For more details on this announcement see here

If you have any questions on how these developments may affect your business, please contact one of the contributors below. There will be further opportunities to submit on these proposed changes as the necessary enacting legislation works its way through Parliament.

This publication is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice. If you require any advice or further information on the subject matter of this newsletter, please contact the partner/solicitor in the firm who normally advises you, or alternatively contact one of the partners listed below.

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