In June 2017 Commerce and Consumer Affairs Minister Jacqui Dean announced that the government was recommending changes to the Commerce Act, including:

  • providing the Commerce Commission with powers to undertake market studies; and
  • 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.

At the same time, the minister announced that any recommendations in relation to the Section 36 market power regime would be pushed back to mid-2018, on the basis that consultation to date had not revealed that an alternative test would be beneficial to competition and consumers.

On August 24 2017 the cabinet papers and regulatory impact statements outlining the thinking behind those decisions were released.(1)

In relation to potential Section 36 market power reform, both the Ministry of Business, Innovation and Employment (MBIE) and the cabinet agreed that it was difficult to identify any cases where the perceived problems with Section 36 had led to actual harm – hence the decision to put that proposal on ice.

Further, in relation to market study powers, the MBIE recommended that the Commerce Commission be given full market investigation powers. However, the cabinet had various concerns with that option, including potential costs to businesses and unnecessary fishing expeditions. Accordingly, the cabinet decided that the commission should have more constrained powers, whereby it can conduct market studies only on the minister's initiative.

As regards the enforceable undertakings regime, both the MBIE and the cabinet agreed that allowing the commission to enter into court-enforceable undertakings would enable negotiated settlements to be more readily enforced.

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For further information on this topic please contact Troy Pilkington at Russell McVeagh by telephone (+64 9 367 8000) or email (troy.pilkington@russellmcveagh.com). The Russell McVeagh website can be accessed at www.russellmcveagh.co.nz.

Endnotes

(1) The relevant cabinet papers and regulatory impact statements can be accessed here.