Government Moves to Strengthen Commerce Act Against Anti-Competitive Practices

The Government of New Zealand is set to modernise the Commerce Act, introducing legislation to empower the Commerce Commission to combat anti-competitive practices. This update aims to prevent what are known as “killer acquisitions” and to address issues related to predatory pricing. The planned changes will mark the first significant amendment to the Commerce Act in nearly two decades.

The announcement follows a consultation process led by former Commerce and Consumer Affairs Minister Andrew Bayly with the Ministry of Business, Innovation and Employment (MBIE) from December 2023 to February 2024. Bayly’s successor, Scott Simpson, has confirmed intentions to revise merger regulations to create a more robust competitive environment. Currently, the Commerce Commission lacks the authority to block a merger if the transaction does not individually alter market dynamics.

The proposed amendments aim to enhance the Commission’s ability to scrutinise mergers that could lead to reduced competition by allowing it to intervene in cases where a larger company seeks to acquire multiple smaller competitors. Such acquisitions can stifle competition, leading to fewer choices and potentially higher prices for consumers.

The Government’s commitment to reform the Commerce Act reflects an increasing awareness of the challenges posed by market concentration and anti-competitive behaviours. By updating the legislation, officials hope to foster a healthier economic landscape that benefits both consumers and businesses.

As the legislation is prepared for introduction in Parliament before the end of the year, stakeholders across various sectors are watching closely. The outcome of these reforms could significantly alter the competitive landscape in New Zealand, with potential implications for how businesses operate within the market.

The proposed changes to the Commerce Act also align with broader global trends seeking to address anti-competitive practices in various industries. As countries around the world grapple with the implications of market concentration, New Zealand’s proactive stance may serve as a model for other nations.

In summary, the Government’s initiative to overhaul the Commerce Act represents a crucial step towards enhancing competition and ensuring fair market practices. With the introduction of this legislation, the Commerce Commission will gain new tools to tackle anti-competitive behaviours that could harm consumers and smaller businesses alike.