This Bill amends the Commerce Act 1986 to simplify approval paths for pro‑competitive collaboration, strengthen merger control, and enlarge the Commerce Commission’s enforcement toolkit. Key features include a statutory notification regime (initially focused on resale price maintenance and small‑business collective bargaining), class exemptions, the ability to accept behavioural undertakings, and new civil remedies to restore competition.
The Bill also tightens rules on predatory pricing by introducing an objective below‑cost test that removes the need to prove recoupment, extends confidentiality protections for information supplied to the Commission (with longer non‑disclosure windows and larger penalties), and creates explicit anti‑retaliation protections for people who assist the Commission. Together these changes shift both the speed and the substantive balance of New Zealand competition regulation, affecting counsel, compliance teams, merger parties, and markets that rely on collaborative arrangements.
At a Glance
What It Does
Establishes a ‘notify‑and‑proceed’ regime for specified collaborative conduct, empowers the Commerce Commission to grant class exemptions and waive fees, and expands merger and enforcement powers — including temporary suspension of acquisitions, call‑in and hold‑separate powers, and court orders to restore competition. It also creates an objective test for predatory pricing and lengthens confidentiality protections for Commission materials.
Who It Affects
Businesses seeking to collaborate (notably on resale price maintenance or small‑business collective bargaining), merging parties and serial acquirers, compliance and legal teams advising those transactions, the Commerce Commission (increased investigatory and decision roles), and employees or third parties who supply information to the Commission.
Why It Matters
The Bill lowers transaction costs for some pro‑competitive collaborations while giving the Commission faster, more flexible tools to scrutinise mergers and enforce the Act. That combination could speed commercial collaboration but also raise regulatory intervention risk and impose new compliance burdens and penalties.
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What This Bill Actually Does
The Bill rewrites several parts of the Commerce Act to rebalance speed and scrutiny in competition law. On collaboration, it creates a statutory notification pathway: firms can notify the Commission of specified conduct and proceed unless the Commission objects.
The initial scope is narrow — resale price maintenance and small‑business collective bargaining — but the framework allows class exemptions to cover other low‑risk categories. The Commission also gains discretion to waive or refund application fees and can authorise collaborative arrangements that change participants over time.
In merger control the Bill clarifies the substantial lessening of competition test by expressly recognising conduct that creates, strengthens or entrenches market power. It allows the Commission to treat serial acquisitions over a three‑year window as the cumulative effect of a single acquisition, and gives the Commission temporary suspension powers (up to 40 working days) and the ability to require clearance applications.
The Commission may accept behavioural undertakings to address concerns, and the Bill formalises more prescriptive time frames and suspension mechanics for acquisition decisions, including the ability to pause statutory clocks while awaiting information.The enforcement side is widened. The Commission can seek corrective action orders and performance injunctions from the High Court to restore competition, and courts may direct compliance with behavioural undertakings.
Protections for people who disclose information to the Commission are expanded: retaliation by employers is penalised through the Employment Relations Act’s grievance process, and broader anti‑victimisation protections create civil remedies including injunctions, penalties and exemplary damages.Finally, confidentiality and information rules change materially. Confidentiality orders and a new statutory exemption for information supplied to the Commission can keep material out of the Official Information Act for ten years (with limited extensions) and substantially raise criminal and civil penalties for breaches.
The Commission can also run market studies requiring industry participants to produce forecasts and follow specified methodologies, with maximum fines for non‑compliance set at $100,000 for individuals and $300,000 for other entities. Taken together, the reforms attempt to speed up legitimate collaboration while equipping the regulator with quicker and stronger tools to prevent and repair anticompetitive conduct.
The Five Things You Need to Know
The Bill creates a statutory notification regime (new sections 65E–65Q) that allows specified collaborative conduct to proceed unless the Commerce Commission issues an objection within a statutory window.
New section 36C establishes an objective predatory pricing test: pricing below Average Variable Cost or Average Avoidable Cost by a firm with substantial market power can constitute misuse of market power without proof of recoupment.
The Commission can impose a temporary suspension of an acquisition for up to 40 working days (new section 47E) and require the acquirer to apply for clearance (new section 47F) where the acquisition may breach the acquisitions prohibition.
Confidentiality protections (new sections 100 and 100AA) can keep supplied material outside the Official Information Act for 10 years, and penalties for breaching confidentiality orders rise to $100,000 for individuals and $300,000 for bodies corporate.
The Commission may require firms participating in a market study to produce forecasts or apply prescribed methodologies, and failure to comply carries maximum fines of $100,000 for individuals and $300,000 for other entities (clause 55 amending section 103).
Section-by-Section Breakdown
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Interpretation and the substantial lessening of competition
The Bill expands key definitions and inserts language clarifying that a substantial lessening of competition can include conduct that creates, strengthens or entrenches market power. Practically, this narrows semantic escape routes defendants have used, and signals that small shifts in market power with outsized competitive effects can trigger liability. Clause 5(2) also enables the Commission to aggregate acquisitions across a three‑year window when assessing prohibited acquisitions, which brings serial purchases within one analytical frame.
Objective predatory pricing test
New section 36C treats certain below‑cost pricing by firms with substantial market power as misuse of that power without requiring proof of later recoupment. The Bill points to Average Variable Cost or Average Avoidable Cost as benchmarks. That lowers the evidentiary bar for predatory pricing claims and shifts focus to contemporaneous pricing and market power rather than long‑term proof of intent and recovery.
Notification regime, class exemptions and streamlined clearance
The Bill inserts a new, faster pathway for collaboration: firms can notify specified conduct and proceed unless the Commission objects under the statutory scheme. The initial scope explicitly targets resale price maintenance and small‑business collective bargaining, but the Commission can proactively issue class exemptions for other low‑risk categories. The clearance test for these streamlined collaboration cases narrows the Commission’s assessment to the purpose of the conduct and whether cartel provisions are reasonably necessary, which reduces the breadth of review.
Merger decision timeframes, behavioural undertakings and suspensions
These clauses prescribe clearer timeframes for acquisition decisions and add statutory tests for extending those timeframes. They also permit the Commission to suspend statutory clocks while awaiting information and to accept behavioural undertakings as remedies. Critically, new powers allow the Commission to impose short‑term suspension orders and call in mergers for review, while enabling hold‑separate arrangements to prevent integration pending assessment.
New court remedies to restore competition
The Bill broadens enforcement remedies: the Commission can seek corrective action orders and performance injunctions to restore competitive conditions after a breach of Part 2. Courts also gain express power to direct compliance with behavioural undertakings and to act pre‑emptively where an intended breach appears likely. These civil tools sit alongside existing pecuniary penalties and compensation regimes.
Whistleblower protections, information powers and international co‑operation
New sections prohibit employer retaliation and broader victimisation for assisting the Commission, and create civil and pecuniary remedies for breaches. The Bill modernises information‑gathering powers — clarifying the reach of search warrants to include intangibles and aligning coercive information powers with contemporary regulatory precedents — and updates rules for cooperation with overseas regulators (including multilateral arrangements).
Confidentiality, non‑disclosure and market study powers
The Commission’s confidentiality orders can now last 10 years and new statutory protection (100AA) can exclude supplied information from the Official Information Act for the same period (with limited extensions). Penalties for breaching confidentiality orders rise sharply. Separately, the Commission can carry out market studies (new section 51F) and require participants to supply forecasts and use prescribed methodologies; refusal to comply attracts fines up to $100,000 for individuals and $300,000 for other entities.
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Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Small businesses engaging in collective bargaining — gain access to a faster, lower‑cost notification pathway that reduces the legal friction around joint negotiation.
- Firms seeking predictable, low‑risk collaborative arrangements — can rely on class exemptions and a narrower clearance test that focuses on purpose and cartel necessity.
- Consumers and rival firms harmed by anticompetitive conduct — benefit from new corrective action orders and performance injunctions designed to restore competition more quickly than litigation‑heavy remedies.
- Whistleblowers and employees who report misconduct — receive statutory protection against employer retaliation and broader anti‑victimisation safeguards when assisting the Commission.
- The Commerce Commission — gains clearer legal tools and discretion (fee waivers, suspension, call‑in, and new remedies) to prioritise and resolve cases faster.
Who Bears the Cost
- Merging parties and serial acquirers — face new scrutiny, potential 40‑working‑day suspensions and the risk that a sequence of past acquisitions may be aggregated and challenged.
- Businesses required to participate in market studies — must produce forecasts under prescribed methodologies or face heavy fines, increasing compliance costs and exposing commercially sensitive data.
- Dominant firms using aggressive pricing strategies — may face easier predatory pricing claims because the recoupment element is removed and below‑cost benchmarks are codified.
- Entities that supply confidential information — confront higher penalties for breaches and longer non‑disclosure windows, increasing legal risk and the need for tighter internal controls.
- The Commerce Commission (resourcing) — must absorb additional investigatory and case‑management work unless fee waivers and refunds are carefully budgeted, potentially shifting resource burdens or delaying other work.
Key Issues
The Core Tension
The central tension is between faster, lower‑cost facilitation of pro‑competitive collaboration and stronger, quicker intervention to prevent or repair anticompetitive harm; achieving one tends to increase the risk or cost of the other, so the Bill leans on regulatory discretion and time‑limited secrecy to try to deliver both outcomes — a trade‑off that raises predictable disputes over where the line between lawful cooperation and illegal coordination should be drawn.
The Bill threads a difficult needle: it simultaneously lowers procedural barriers for some collaborations and raises substantive and procedural scrutiny elsewhere. The notify‑and‑proceed model speeds some lawful arrangements, but ‘proceed unless the Commission objects’ transfers the onus of early assessment to the regulator and creates a tight timetable in which the Commission must identify risks — a practical challenge that could lead to either false negatives (harmful conduct slipping through) or conservative objections that chill legitimate collaboration.
Extended confidentiality and higher penalties protect sensitive commercial information and encourage frank disclosure to the Commission, but they also reduce transparency and limit public oversight under the Official Information Act for a decade. That shift increases the stakes of Commission decision‑making and elevates the political and legal consequences of mistakes.
Likewise, removing the recoupment requirement for predatory pricing simplifies enforcement but raises legal uncertainty: aggressive price competition that is ultimately pro‑competitive may invite legal action before market effects can be observed.
Operationally, the new suspension, call‑in and behavioural undertaking tools concentrate discretionary power in the Commission. The Bill limits judicial modification of undertakings and channels appeals on some notification decisions to questions of law only, which narrows court review.
These design choices speed regulatory action but concentrate risk: misapplied suspensions or undertakings could impose significant commercial disruption with limited immediate recourse, placing a premium on the Commission’s internal processes, resourcing, and rule‑making clarity.
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