New Zealand Law Society - Commerce Amendment Bill introduced

Commerce Amendment Bill introduced

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Commerce and Consumer Affairs Minister Kris Faafoi has introduced the Commerce Amendment Bill to Parliament.

This bill amends the Commerce Act 1986 by introducing a competition studies regime that improves the effectiveness of the regulatory regime for airports, and updates the alternative enforcement mechanisms available to the Commerce Commission.

The bill would insert a new Part 3A, Competition Studies, into the Commerce Act. This would come into force one month after the Royal Assent, with the rest of the bill coming into force on the day after the Royal Assent.

The new Part 3A empowers the Commerce Commission to undertake studies into the competitive conditions relating to goods or services in a particular sector if it is in the public interest. The Commission may commence a study on its own initiative or at the direction of the Minister of Commerce and Consumer Affairs. These studies will be used to gain an insight into markets that may not be functioning well but where no breaches of the Act are apparent.

The bill makes improvements to strengthen the regulatory regime for airports under Part 4 of the Act. Currently, the airports regulated under Part 4 are subject only to information disclosure regulation, but there is no specified process for imposing additional regulation if information disclosure regulation is found to be ineffective.

The bill will make it clear that the Commission’s summary and analysis reports can comment on whether information disclosure is effective for a regulated supplier.

The bill introduces an enforceable undertakings regime into the Act. These undertakings will be available for the Commission to accept in relation to the enforcement of the Act. The enforceable undertakings regime will complement existing arrangements in relation to settlements. If an enforceable undertaking is breached, the High Court may order compliance with the order or impose a financial penalty.

The bill also repeals the existing cease and desist regime. This regime has rarely been used and offers no practical advantages over the Commission seeking an injunction from the court to restrain harmful anti-competitive conduct.

The Ministry of Business, Innovation and Employment has released a departmental disclosure statement on the bill and a number of regulatory impact statements.