The Commerce Amendment Bill (Bill) passed its first reading on 1 May 2018 and has now been referred to the Select Committee. If enacted, the Bill would lead to significant changes to the Commerce Act (Act), including giving the Commerce Commission (CC) the ability to undertake market studies and accept enforceable undertakings. Other features include changes to how the CC regulates airports and an end to the “cease and desist” regime.
Market studies
The Bill would empower the CC to undertake “competition studies” into particular markets that may be functioning sub-optimally, if it is in the public interest to do so. A “competition study” is a study of any factors that may affect competition for the supply or acquisition of goods or services.
Competition studies could be initiated by the CC or the Minister of Commerce and Consumer Affairs (Minister). Upon completion of each study, the CC would be required to submit a final report to the Minister. Those reports would also be made publicly available.
Notably, the CC would have the ability to exercise its “compulsory” section 98 powers in relation to a market study – meaning that it could require parties to supply information or documents or to give evidence.
Enforceable undertakings
The Bill would also empower the CC to accept enforceable undertakings under the Act. This new alternative enforcement mechanism would sit parallel to the CC’s ability to negotiate settlements. However, unlike some of its overseas counterparts, the CC would not be able to accept enforceable behavioural undertakings in the merger context.
If the CC considered that an undertaking had been breached, it would be able to apply to the High Court for an order directing compliance with the undertaking, directing the person to pay the Crown in relation to the breach, or any other order the Court thinks appropriate, including an order for consequential relief.
Other changes
The Bill also proposes a number of changes to the regulatory regime for airports under the Act. It also repeals the existing “cease and desist” regime, which has been used only once since it was introduced in 2001. Submissions on the Bill are due on 15 June 2018 and may be made here.
Other links
A copy of the Bill may be found here.
A media statement in relation to the Bill may be found here.
The Cabinet paper seeking approval for the Bill may be found here.