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COVID-19 responses: The Government and Commission indicate a "flexible" approach to competition law

Published on:
23 March 2020

Given the unprecedented issues New Zealand is facing in the battle against COVID-19, it was a welcome development that the Commerce and Consumer Affairs Minister, Hon Kris Faafoi, issued a policy statement to the Commission yesterday "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 we respond to COVID-19." 1

It was equally welcome to see the Commerce Commission's response that:

“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.”2

This policy statement, and written response from the Commission, does not change the law. In that respect, it does not go as far as the United Kingdom where the laws themselves have been relaxed3. However, it is a useful first step towards providing businesses the reassurance they need to know that (in the words of the Minister) "strict competition rules [will not] get in the way of common sense and legitimate collaboration as business responds to COVID-19". 

We welcome these developments from both the Government and the Commission. 

If you want to discuss how these developments might affect your business, or your business' response to COVID-19, please contact Troy Pilkington.

FOOTNOTES
  1. ∧ Commerce and Consumer Affairs Minister. 22 March 2020. Government statement on commercial cooperation during COVID-19.
  2. ∧ Commerce Commission. 22 March 2020. COVID-19 - Commerce Commission approach to essential goods and services business cooperation.
  3. ∧ Department for Environment, Food & Rural Affairs, Department for Transport, Department for Business, Energy & Industrial Strategy, The Rt Hon George Eustice MP, The Rt Hon Grant Shapps MP, and The Rt Hon Alok Sharma MP. 19 March 2020. Supermarkets to join forces to feed the nation.

This article is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice. If you require any advice or further information on the subject matter of this newsletter, please contact the partner/solicitor in the firm who normally advises you, or alternatively contact one of the partners listed below.