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Competition Alert – March 2018

Home Insights Competition Alert – March 2018

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Contributed by: Troy Pilkington, Sarah Keene and Hannah Loke

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Published on: March 28, 2018

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Bill tabled to provide market study powers to the Commerce Commission

Today the Commerce and Consumer Affairs Minister, Hon Kris Faafoi, tabled a Bill in the House to enable the Commerce Commission to undertake market studies. This would empower the Commission to undertake research into the structure and behaviour of markets, and to compel organisations and businesses to provide information to the Commission.

Under the Bill, market studies could be initiated either by the Minister or self-initiated by the Commission.

Minister Faafoi's accompanying media release states checks and balances will be in place to ensure market studies are used where there is a real need in the interest of consumers. The checks and balances contained in the Bill include the Commission or Minister:

  • only be able to initiate a market study where it is considered to be in the "public interest"; and
  • needing to publish the terms of reference for the market study in advance, and advise the date by which the final report will be published.

The Ministry's associated Regulatory Impact Statement has said that the Commission will be provided with "modest additional funding" to enable the Commission to conduct these market studies. Presumably this additional funding will be sufficient to avoid this new power causing resourcing issues and timing delays for the Commission's other obligations and processes.

The Bill also provides for two other matters in relation to the Commerce Act's competition law regime, namely:

  • repealing the Commerce Act's cease and desist regime; and
  • empowering the Commerce Commission to accept enforceable undertakings to resolve restrictive trade practices enforcement cases under the Commerce Act. This would enable the Commission to litigate breaches of those undertakings without needing to prove that a breach of the Commerce Act has arisen. This power would not apply in relation to merger enforcement cases.

These two changes reflect sensible changes to the Commerce Act given:

  • the cease and desist regime had only been used once since it was introduced in 2001; and
  • it is useful for the Commission to have more flexible enforcement tools in its toolkit.

Minister Faafoi has asked officials to fast track this Bill so that it is "operational by the end of 2018". The Bill is set down to have its first reading next week, before it will be referred to a select committee for consideration. There will be opportunity for consultation through the select committee process.

If you have any questions on how these developments may affect your business, please contact one of the contributors below. 

The Bill also provides for changes to the regulatory regime for Airports, which are discussed in our separate Regulatory Alert.

Further reading can be found as follows:

  • A link to Minister Faafoi’s media statement announcing the tabling of the Bill here.
  • A copy of the Bill is available here.
  • Copies of the Cabinet papers and regulatory impact statements are available here

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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