There were a number of key competition law developments in New Zealand during 2017, including the enactment of the Cartels Act, the postponement of the reform of the prohibition on taking advantage of market power and a significant increase in the proportion of declined merger clearances. In addition, the new Labour-led government stated that it is keen to empower the Commerce Commission to undertake market studies before the end of 2018.
There is a debate in competition law at present concerning whether a company can restrict online sales for their products. Under New Zealand competition law, a supplier restricting its customers from selling on online platforms could be penalised if, among other things, it has market power and imposes restrictions to take advantage of that market power for an anti-competitive purpose. However, legitimate and pro-competitive justifications can be relevant in assessing the legality of such restrictions.
The Commerce Commission recently released its Consumer Issues Report 2016/17. Although greater transparency is to be commended, a failure to balance this against the legitimate interests of businesses that have not been involved in any breach of the law, but which are still named and shamed, risks turning the report into a publication which does more harm than good.
The commerce and consumer affairs minister recently announced that the government was recommending changes to the Commerce Act, including providing the Commerce Commission with powers to undertake market studies and allowing Commerce Commission settlements to be registered as court-enforceable undertakings, so that the commission can litigate breaches of those undertakings without needing to prove that a breach of the Commerce Act has arisen.
The Commerce (Cartels and Other Matters) Amendment Bill was recently enacted into law. Businesses finally have the additional certainty of prohibitions that are better aligned with the equivalent Australian law and an exemption that is better targeted at efficiency-enhancing collaborations between competitors. Businesses are likely to regard this as a positive step towards having both a more fit-for-purpose exemption and legal certainty regarding the competition law regime going forward.