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ComCom’s 2019/20 priorities - key details for marketers and online retailers

August 12, 2019

Contacts

Partners Richard Watts
Senior Associates Sarah Lee

Competition law (inc cartels) Consumer law

This is an edited version of an article we first published on July 30, 2019

The Commerce Commission (Commission) recently released its priorities for 2019/20, detailing enduring priorities and key focus areas for the year ahead. In this FYI we highlight the key details for marketers and online retailers.

2019/20 priorities - What you need to know

  1. The Commission’s focus areas for 2019/20 will include: online retail, environmental claims in advertising, and motor vehicle financing.
     
  2. The Commission wants to better understand the issues faced by consumers and businesses. They will also update the Enforcement Response Guidelines.
     
  3. The Commission anticipates involvement in policy development and educating businesses/the public across several areas including:
  • changes to the Fair Trading Act
  • the review of the consumer credit law
  • the new criminal cartel offence in the Commerce Act coming into force.

Enduring priorities

The following areas are enduring priorities for the Commission, being areas with the potential to significantly impact consumers, businesses and markets:

  • Product safety and construction cases: The Commission will continue its unannounced visits to stores as part of its product safety work. There have been 18 prosecutions against toy importers and retailers over the past year for selling unsafe products
  • Credit issues
  • Cartel and anti-competitive conduct
  • Mergers, including those that are not notified
  • Critical infrastructure industries like telecommunications, energy and airports.

Focus areas

The Commission has also named the following focus areas, which it will target with its resources given their importance to everyday life and the economy:

  • Environmental claims when advertising products: In general, consumers cannot independently verify these claims and must trust the business’ statement to be true. The Commission’s work in this area will involve educating businesses about ensuring their claims are accurate and can be relied on by consumers
  • Online retail, with a focus on identifying harm to consumers, educating traders and consumers, and investigating complaints and taking action where appropriate, even where the trader is based outside of New Zealand. The Commission has identified “pressure selling” or “nudge tactics” that rush purchases by creating a sense of urgency in consumers (for example, claiming “ends in 24 hours” or “only 2 days left”) as an area of concern with online retailers. The Commission has said that they are committed to eliminating such misleading sales tactics, which is currently prevalent among online retailers globally. Fake or tweaked online reviews is another area that the Commission is aggressively pursuing, with a recent case brought against online holiday home management company Bachcare for removing and changing negative online reviews
  • Monitoring and reporting on telecommunications’ retail service quality: The Commission’s reports in this area will assist consumers in choosing the best services and providers for them, based on information such as customer service, billing, speed and performance
  • Motor vehicle financing and related add-ons - with a focus on compliance with consumer credit laws
  • Educating traders about conduct that may contravene cartel laws
  • Consulting on and completing the fuel market study
  • Resetting the five-year revenue limits and quality standards for electricity networks
  • New up-front regulatory rules for fibre broadband services (via input methodologies).

Connecting better with consumers and businesses

In order to improve its understanding and effectiveness as a regulator, the Commission has signalled that it will be looking to connect more with both consumers and businesses to better understand the issues they face. As part of this, the Commission will update its Enforcement Response Guidelines, which set out its approach to the enforcement of New Zealand’s fair trading, competition and consumer credit laws.

Legislative change

Finally, the Commission has noted that it will continue to contribute to policy development by providing expert advice in relation to legislative reforms and by informing businesses of their obligations (and consumers of their rights) when changes are made to the law.

In 2019/20, the Commission anticipates involvement in the following areas:

  • Providing input into the proposed changes to the Fair Trading Act (ie unconscionable conduct, unfair contracts etc)
  • Preparing for the new criminal cartel offence in the Commerce Act coming into force in 2021, as well as the proposed changes to s36 of the Commerce Act (taking advantage of market power)
  • Participating in the review of the consumer credit law and the implemented changes passing into law
  • Continuing to implement changes to the Telecommunications Act
  • Considering the findings of the Electricity Price Review.

The Commission’s 2019/20 priorities can be reviewed in full here.

Our Sales and Marketing law specialists are happy to answer any questions you have about the Commission’s upcoming priorities and focus areas.

Contributors sam.comber@simpsongrierson.com, juliet.bing-harmon@simpsongrierson.com