The Commerce Commission has published a new cartel leniency policy and the Ministry of Economic Development is considering whether to punish hardcore cartels with criminal penalties. Updating the leniency policy is a welcome move, giving companies greater certainty in dealing with the regulator, but does a small, trade-dependent nation such as New Zealand need a criminal cartel regime?
A recent proposed ports merger is a case in point of the government's suggestion that merger control threshold rules may be lowered in certain key sectors of the economy. The catalyst for change appears to be a repackaged 'national champion' argument: domestic firms should be allowed to consolidate in order to compete better internationally.
The Commerce Commission recently won three high-profile victories across the spectrum of competition law, obtaining record-breaking penalties in New Zealand's largest-ever cartel prosecution, preventing an anti-competitive merger and enforcing a cease and desist order for the first time since its power to do so was introduced in 2001.
The Commerce Commission has recently considered competition in New Zealand markets which involves aspects of two-sided markets. Issues surrounding two-sided markets recently arose in the context of four separate media acquisitions and in relation to the commission's recently completed investigation recommending regulation of mobile termination rates.
Prime Minister Helen Clark used her first address to Parliament in 2006 to identify the implementation of "higher-quality regulation" as her government's priority. Investors in infrastructure are concerned that a light regulatory framework is reducing investment incentives; the debate on reform will also focus on increasing the scope of merit-based appeals against regulators' decisions.
The New Zealand government has accused two companies operating gas distribution pipelines of making monopoly profits. It has imposed direct price control for the first time in the 20-year history of the country's present competition legislation. The decision follows a two-year investigation and consultation process conducted by the National Competition Authority.
Anti-cartel enforcement activity in New Zealand is set to increase after the recent announcement of additional federal government funds, and the implementation of new leniency and cooperation policy tools. It is hoped that companies will be less willing to risk their cartel activities going undiscovered and more willing to self-report promptly in the hope of receiving first-mover advantage.
An independent report commissioned by the governments of New Zealand and Australia has stopped short of recommending radical changes to the competition laws of both countries that would introduce an Australasian 'one-stop shop' competition regime. It is thought that greater net benefits will arise by deepening cooperation between the respective regulatory agencies.
The Commerce Act has the potential to impose ancillary liability on anyone who is a secondary party to an offence. However, until recently, the Commerce Commission has been occupied pursuing the primary offenders. A number of signs suggest that advisers should now consider this issue more seriously.
The government has confirmed the changes it will make to the Commerce Amendment Bill in order to bring the Commerce Act into line with the Australian Trade Practices Act.
The High Court has issued its ruling on penalties in a case involving price fixing by the companies Caltex, Mobile and Shell, with Caltex receiving the largest penalty as the initiator of the agreement.
The Newsletter reports on a recent New Zealand Commerce Commission ruling on competitive price fixing by three of the four major oil companies in New Zealand.