It’s been another dynamic year for New Zealand competition law, with the collaborative activity clearance and restrictive trade practices (RTP) provisional authorisation mechanisms introduced in recent years starting to see use and other proposals for change still on the horizon. Market studies have also seen a lot of activity, as has the Commission Commission’s (NZCC’s) case register.
On the consumer law side, the Fair Trading Amendment Act was enacted and the Government decided to implement a new legislative framework for a New Zealand consumer data right.
Changes to competition law
- The criminal offence for cartel conduct came into force on 8 April. You can now face jail time for intentionally agreeing with competitors not to compete with one another. See our newsletter for information on how the offence works.
- The Commerce Amendment Bill which proposes changing the test for misuse of market power and removing IP exceptions in the Commerce Act was introduced in Parliament and is now before the Committee of the Whole House. Since our newsletter on the Amendment Bill, it now also proposes empowering the NZCC to grant RTP interim authorisations, a power which it currently temporarily has (under the name provisional authorisation) under amendments passed because of Covid-19.
Competition activity
- The first collaborative activity clearance application was filed. Obtaining clearance for a collaborative activity confirms the collaborative activity does not breach the prohibition against cartels and anticompetitive agreements, and protects it from challenge under those provisions.
- Technology product manufacturer HP filed the first RTP authorisation application in almost 3 years. It successfully got authorisation to engage in resale price maintenance – another first for New Zealand.
- This was soon followed by two more RTP authorisation applications from The New Zealand Tegel Growers Association Incorporated (NZTGA) and then News Publishers’ Association of New Zealand Incorporated (NPA). Both applications are for collective bargaining and both also applied for the first provisional authorisations under the Covid-19 amendments. The NZCC granted its first provisional authorisation under the Covid-19 amendments to NZTGA and is still deciding whether to grant provisional authorisation to NPA.
- For the third year in a row, the NZCC declined no merger clearance applications. It cleared 10 applications (one of which was cleared subject to a divestment undertaking) and 3 applications were withdrawn. 4 clearance applications are still before the NZCC.
- No proceedings have been filed pursuant to merger investigations since 2019 but two merger investigations opened last year remain open.
- The NZCC successfully prosecuted 2 cartels. One related to an agreement to implement the minimum price of taxi fares and the other related to container depot price fixing. The NZCC also filed proceedings seeking declarations that consumer loan provider Moola engaged in cartel conduct relating to online advertising on Google Ads.
Market studies
- Part of NZ’s new fuel regulatory regime, resulting from the 2018 retail fuel study, came into force. The NZCC published an open letter to fuel industry participants on the new requirements and those that will come into force next year. The regime includes terminal gate pricing, wholesale contract rules and dispute resolution procedures.
- The retail grocery market study saw the release of a 517 page draft report, 3 research reports commissioned by the NZCC, and a virtual consultation conference taking place on 7 days. The draft report found “competition in the retail grocery sector is not working well for consumers” and identified a wide range of possible recommendations. The final report is due on 8 March 2022.
- Terms of reference for the residential building supplies study were also published. The NZCC has already published a statement of process and a preliminary issues paper for this study.
Consumer law activity
- The Fair Trading Amendment Act was enacted which introduces a prohibition against unconscionable conduct and extends the prohibition against unfair contract terms to small trade contracts. These changes will come into effect on 16 August 2022.
- The NZCC conducted over 150 Fair Trading Act (FTA) investigations, received 7 court judgments, received 3 enforceable undertakings and issued 10 warning letters for alleged FTA breaches
- The NZCC revealed the 5 industries it received the most fair trading complaints about in the year ending June were (1) appliance and electronics retail (2) motor vehicle retail (3) supermarkets / grocery stores (4) telecommunications retail service providers (5) professional and personal services
- The Government decided to establish a consumer data right (CDR) framework in New Zealand. A CDR will require participating businesses to share data they hold on a consumer when requested to by the consumer. It will increase data portability and reduce switching costs.
Key takeaways for 2022
Next year we look forward to findings from the building products study, the grocery study final report, seeing whether the Commerce Amendment Bill passes through Parliament, and the fair trading amendments coming into force. Have a safe and happy holiday period everyone and we hope to see you again next year!