Competition Law Review: Submissions on the Commerce Act 1986

Modernising Competition Law: Our Take on the Commerce Act Review

The Ministry of Business, Innovation and Employment (MBIE) has recently called for submissions as part of its review of the Commerce Act 1986. The review is focused on modernising New Zealand’s competition framework and ensuring it remains effective and fit for purpose.

MBIE invited feedback on the current merger control regime and anti-competitive conduct provisions within the Commerce Act. Specifically, the review focuses on:

• Enhancing the merger control regime to ensure the Commerce Commission can prevent or address mergers likely to substantially lessen competition;
• Modernising tools to address anti-competitive conduct, especially for businesses with significant market power;
• Exploring potential new provisions to enable the Commerce Commission to influence business behaviour through mechanisms like industry codes; and
• Considering technical amendments to ensure the Act is both effective and efficient.

Why the Review Matters

The review is motivated by concerns that New Zealand’s competition settings may no longer be adequate for the current economic and market environment. Key drivers for the review include:

• Findings from market studies highlight insufficient competition in sectors like fuel, groceries, and building supplies.
• Recommendations from the 2024 OECD Economic Survey of New Zealand to strengthen competition law and align with international best practices.
• Recognition of Australia’s recent competition law reforms, prompting consideration of trans-Tasman regulatory alignment where appropriate.
• The Government’s focus is on rebuilding the economy, lowering the cost of living, and increasing productivity as part of broader economic priorities.

Our View

Our submissions to MBIE were informed by our experience helping clients navigate these areas of competition law and the practical challenges that often arise. The submissions primarily aimed at improving New Zealand’s competition framework through greater clarity, accessibility, and support for collaborative and competitive practices. We emphasised the following priorities:

1. Clarification of Key Legal Tests and Regulatory Provisions: in particular, legislative clarity on the substantial lessening of competition test, substantial degree of influence test, and other merger review provisions.
2. Promoting Beneficial Collaboration and Innovation: Support for safe harbour and de minimis thresholds to mitigate the chilling effect caused by uncertainties in the cartel provisions, enabling SMEs and innovation-driven enterprises to collaborate confidently.
3. Supporting SMEs and Reducing Compliance Barriers: Simplified processes, fee waivers, and practical guidance to reduce compliance costs and improve accessibility.

If you have any questions about the Commerce Commission’s approach, or about New Zealand’s competition framework generally, please contact our Commercial Team.