New Zealand Law Society - Commerce Commission asked to take account of exceptional circumstances

Commerce Commission asked to take account of exceptional circumstances

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The Government has asked the Commerce Commission to take account of the exceptional circumstances created by COVID-19 when monitoring business behaviour in coming weeks.

“The purpose of my request to the Commerce Commission is to make sure businesses can work together in ways that will allow them to provide things like grocery products and other essential goods and services to New Zealanders in a fair and equitable way,” Minister of Commerce and Consumer Affairs Kris Faafoi says.

Mr Faafoi has emphasised that his statement does not override the Commerce Commission's statutory powers of independence.

He says he has written to the Commerce Commission requesting it to be more flexible than it might be in normal times around allowing businesses to work together, share resources, or take other cooperative measures to ensure New Zealanders have access to the products and services they need as they respond to COVID-19.

“The Government is aware that, as a result of COVID-19, sectors like supermarkets and telecommunications companies may need to work in a more collaborative way than the Commerce Commission would normally be comfortable with," he says.

““Now is not the time for strict competition rules to get in the way of common sense and legitimate collaboration as business responds to COVID-19,”

Mr Faafoi says that this does not mean the Government will tolerate unscrupulous behaviour where COVID-19 is used as an excuse for non-essential collusion or anti-competitive business practices, such as price fixing.

“This should also not be seen as some sort of licence for price gouging or hoarding. The Government and the public would take an extremely dim view of that.

“I have faith that New Zealand’s supermarkets and other essential services, as well as New Zealand consumers, will act responsibly and with the best interests of their fellow New Zealanders in mind during these extraordinary times."

Commerce Commission response

The Commerce Commission says it welcomes the Government's policy statement.

Chair Anna Rawlings says that following the Government’s announcement, the Commission wants to offer reassurance to businesses providing essential goods and services.

“The Commission is aware that businesses are doing everything they can in extremely difficult circumstances to meet New Zealanders’ needs. We do not want them to feel constrained by the Commerce Act in working together to do this. The Commission has no intention of taking enforcement action under the Commerce Act against businesses who are cooperating to ensure New Zealanders continue to be supplied with essential goods and services during this unprecedented time. If you need to work with your competitors to share staff or distribution networks or take other measures to ensure security of supply, you are able to do this.

“However, the Commission will not tolerate unscrupulous businesses using COVID-19 as an excuse for non-essential collusion or anti-competitive behaviour. This includes sharing information on pricing or strategy where it isn’t necessary in the current situation.” Ms Rawlings says.

The Commission says it will be issuing further guidance for businesses on its website in the coming days.