The recent passing of the Commerce (International Co-operation, and Fees) Amendment Act (International Co-operation Act) signals another step in the harmonisation of Australia and New Zealand's business laws as we move towards a single economic market. The International Co-operation Act gives the Commerce Commission a range of powers under which it can assist overseas regulators in their investigations.
In this Q+A, we answer some obvious questions arising out of the passage of the International Co-operation Act. Do not hesitate to contact any of the authors listed below if you have any questions.
What information can the Commerce Commission share?
The International Co-operation Act allows the Commerce Commission to provide "compulsorily acquired information" to overseas regulators. Compulsorily acquired information is information:
- acquired under the Commerce Commission's powers to require the provision of information under section 98 of the Commerce Act;
- acquired under a search warrant issued under section 98A of the Commerce Act; and
- acquired under section 98H of the Commerce Act, which provides similar powers to section 98 in relation to acquiring information from Australian residents related to taking advantage of market power in a trans-Tasman market.
Does the Commerce Commission have any other powers?
As well as the sharing of compulsorily acquired information, the International Co-operation Act allows the Commerce Commission to provide "investigative assistance" to overseas regulators. This includes the Commerce Commission exercising its powers under sections 98, 98A and 98H of the Commerce Act in order to assist an overseas regulator.
Who can the Commerce Commission co-operate with?
The Commerce Commission can provide both compulsorily acquired information and investigative assistance to an overseas regulator that is a party to a co-operation arrangement with the New Zealand Government or the Commerce Commission.
The Commerce Commission and Australian Competition and Consumer Commission (the ACCC) issued a joint statement when the International Co-operation Act was passed. It is likely, then, that the ACCC will be the first overseas regulator to enter into a co-operation arrangement with the Commerce Commission. Other overseas regulators that could enter into co-operation arrangements include the United Kingdom's Office of Fair Trading and the Federal Trade Commission in the United States.
Does this mean the Commerce Commission can act at the will of the overseas regulator?
While the Commerce Commission will be acting at the request of an overseas regulator, there are a number of factors that the Commission must be satisfied about before providing investigative assistance or compulsorily acquired information. In particular, the Commerce Commission must be satisfied that:
- providing the information or assistance will assist the overseas regulator in performing its functions;
- the provision of the information or assistance will not be inconsistent with the co-operation arrangement; and
- the provision of the information or assistance will not significantly prejudice New Zealand's international trade interests.
As well as the three factors that the Commerce Commission must be satisfied of, the Commission is also required to consider:
- whether complying with the request will substantially affect the Commission's ability to perform its other functions;
- whether the overseas regulator could more conveniently obtain the information or assistance from another source; and
- whether the request would, in the Commission's opinion, more appropriately be dealt with under the Mutual Assistance in Criminal Matters Act.
As well as these express considerations, the standard checks and balances the Commerce Commission faces in exercising its powers generally will apply. For example, a search warrant can only be granted if there are reasonable grounds to believe that it is necessary to ascertain whether a breach has taken place and a District Court Judge needs to issue the warrant on the basis of evidence provided by the Commission.
Will I know that my information is being shared?
If compulsorily acquired information is shared with an overseas regulator, the Commerce Commission must, as soon as practical after providing the information, notify the person from whom the information was acquired and every person to whom the information relates.
Why are these information sharing powers necessary?
The addition of these new powers to the Commerce Commission's armoury recognises the fact that commerce has an ever-increasing international element. Breaches of competition laws often involve companies operating in a number of markets throughout the world, so it makes sense for enforcement agencies in each market to be able to share information. The International Co-operation Act is part of a larger move towards making New Zealand's competition laws more "international". The Commerce (Cartels and Other Matters) Amendment Bill, for example, will expand the extra-territorial reach of the Commerce Act.
The International Co-operation Act is also part of a wider harmonisation of New Zealand and Australia's competition, and general commercial, laws as we move towards a single economic market. Both the Commerce Commission and the ACCC welcomed the passing of the International Co-operation Act, while the Minister of Commerce noted its importance in supporting the Commerce Commission's role in the context of global business today.
Does the International Co-operation Act only apply to competition law?
Although the International Co-operation Act itself only applies to assisting overseas regulators with investigations into competition law breaches, separate legislation was also passed to amend the Fair Trading Act, Credit Contracts and Consumer Finance Act and Telecommunications Act. The effect of these amendments is that the Commerce Commission will be able to share information and investigative assistance to overseas regulators that relates to potential breaches of fair trading, consumer credit and telecommunications laws.