New Zealand Law Society - Government considering changes to misuse of market power provisions

Government considering changes to misuse of market power provisions

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Commerce and Consumer Affairs Minister Jacqui Dean says the Government has been considering changes to section 36 of the Commerce Act 1986, around misuse of market power.

“While the consultation process has demonstrated that section 36 does not work perfectly for some types of conduct, it is not yet clear whether an alternative test would benefit competition or consumers. 

“Officials will continue to look into this and will report back in mid-2018 before decisions are made regarding section 36,” Ms Dean says.

Following a review of the Act, Ms Dean says the Government is recommending that the Commerce Commission be allowed to undertake market studies.

“These proposals would include empowering the Commerce Commission to undertake market studies and improve its enforcement actions without having to go to court,” Ms Dean says.

“This will allow the Government to be proactive, rather than reactive.

“It will mean Government can direct the Commission to examine markets where there are potential issues rather than just waiting for breaches of competition law to occur.

“A market studies power is often used by competition authorities around the world and introducing one here will bring New Zealand into line with similar jurisdictions.”

Other proposed changes to the Commerce Act include repealing the cease-and-desist regime, as well as allowing settlements to be registered as enforceable undertakings so any breaches can be quickly penalised by the courts.

“These changes will strengthen the ability of the Commission to enforce settlements without the expense and uncertainty of litigation. The cease-and desist-regime is cumbersome and has only been used once since it was introduced in 2001,” Ms Dean says.

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