Competition Alert – September 2018

The Commerce Commission's competition studies powers move ever closer  

Yesterday the Transport and Infrastructure Committee (Committee) released its Final Report on the Commerce Amendment Bill (Bill). The Committee recommended by a majority that the Bill be passed, albeit with some amendments to the Bill as originally introduced.

The thrust of the Bill is that it would:

• enable the Commerce Commission (Commission) to undertake "competition studies"; and
• update the alternative enforcement mechanisms available to the Commission (to replace the little-used "cease-and-desist" regime).¹

See further insights on the Bill in our March 2018 Competition Alert.

While not making any material changes to those key aspects of the Bill, the Committee's Final Report makes the following changes to the competition studies regime:

• allowing the Commission to issue confidentiality orders over specified information when carrying out competition studies. This was in response to concerns about the commercial sensitivity of information that the Commission could obtain through a competition study;
• clarifying that the Commission has the option of making no recommendations in its report following a competition study; and
• adding a requirement that the Minister responds to the Commission's final report within a reasonable timeframe.

In relation to the Commission's alternative enforcement mechanisms, the Committee's Final Report proposes the following changes:

• allowing the Commission to accept structural undertakings in relation to the enforcement of the merger control prohibition (currently, in relation to mergers, the Commission can only accept structural undertakings when a party has formally sought clearance or authorisation for that merger); and
• making it clear that the Commission's ability to accept undertakings can include undertakings to pay compensation, to take action to remedy the matter, and to contribute to all or part of the Commission's costs in connection with the matter. The Commission had requested this additional clarity to resolve uncertainty arising from the Supreme Court's decision in the Pike River/Worksafe matter,² which narrowed the scope in which an agency can reach out-of-court settlements in the absence of express statutory powers to do so.

In relation to the merger control regime, Russell McVeagh had also submitted that the Bill enable the Commission to accept behavioural undertakings in the context of merger clearance applications. The Commission made a similar submission. Disappointingly, the Committee said that without a full policy review it was unable to support that change.

If you have any questions on how these developments may affect your business, please contact one of the contributors below.

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.