New Zealand competition law has had a busy year with record numbers of clearance applications, leniency applications, and market study reports.
We summarise below some competition highlights for 2022 and some insider intel on what we can look forward to for the new year.
Thank you all for your continued support.
2022 competition highlights
- The New Zealand Commerce Commission (NZCC) decided 21 merger clearance applications in FY21/22 – a record number since FY07/08. The NZCC usually decides around 10 applications a year. The NZCC has noted many of these matters were complex and that its clearances pipeline is now much reduced. The NZCC currently has 3 open merger clearance applications.
- The NZCC similarly had double the usual number of cartel leniency or immunity applications – contrary to international trends where immunity applications have been decreasing.
- For the fourth year in a row, the NZCC declined no merger clearance applications. However of the 16 merger clearance applications closed in 2022, 4 were withdrawn and 3 were cleared subject to divestment.
- The NZCC granted 2 authorisation applications for collective bargaining. Provisional authorisation was also granted in these cases allowing the parties to collectively bargain before the final determination.
- The first collaborative activity clearance application was declined. There have been no further applications yet.
- The NZCC issued proceedings against Objective Corporation Limited for its acquisition of Master Business Systems Limited. Objective was ordered to pay a $1.54M penalty.
- Significant pecuniary penalties were imposed for cartel conduct. $4.9M on Mondiale Freight Services Limited & $65K each on 4 of its current and former directors, and $4.6M on Oceanbridge Shipping Limited & $100K on its director.
- The NZCC released two market study reports for the retail grocery industry and residential building supplies industry.
- Fair Trading Act changes came into force including the prohibition on unconscionable conduct and extending the unfair contract terms regime to small trade contracts.
- A new grocery covenants prohibition was added to the Commerce Act in response to the retail grocery market study.
Line up for 2023
Things to look forward to in the new year include:
- The new misuse of market power test coming into effect on 5 April 2023. Persons with substantial market power will be prohibited from engaging in conduct with the purpose, effect, or likely effect of substantially lessening competition in a relevant market. The NZCC is expected to publish new Misuse of Market Power Guidelines to accompany this and has already consulted on a draft.
- A NZCC restrictive covenants compliance programme. The NZCC has announced it will be undertaking a compliance programme in early 2023 to promote Commerce Act compliance relating to restrictive land covenants and exclusive leases.
- Intellectual property guidelines. The NZCC has released draft guidelines for consultation on the application of competition law to intellectual property rights. The deadline for submissions is 10 February 2023. The guidance will be welcome given from 5 April 2023, intellectual property exceptions in the Commerce Act will be removed.
- Revised Merger and Acquisition Guidelines (MAG). While the latest version of the MAG is from May 2022, its been almost 10 years since the last substantive update of the MAG. The NZCC expect to publicly consult on a draft revised MAG in the first half of 2023.
- New divestment undertaking guidelines. The NZCC saw an increasing number of divestment undertakings in the past 12-18 months. It currently has guidance on divestment undertakings in the MAG but the NZCC plans to publish new, standalone guidelines on divestment undertakings. It expects to release a draft for consultation in the first half of 2023.
- The Government’s response to the residential building supplies market study final report. The Government’s response is expected in March 2023.