Commerce Act amendments reach Parliament

In this article, we discuss the recent introduction of the Commerce (Promoting Competition and Other Matters) Amendment Bill (the Bill) which proposes widely anticipated reforms to the Commerce Act, following the Government’s review of the state of competition law in New Zealand.

Where we have been

In December 2024, the Government announced a review of New Zealand’s competition law settings, with a view to reforming key parts of the Commerce Act.

Alongside the announcement, MBIE published a proposal document, which tabled the Government’s areas of focus, and potential amendments (you can read our article about this document here). MBIE sought public submissions on its proposals from stakeholders, receiving these mainly from law firms and companies that frequently engage with the Commerce Act.

In August and September this year, the Minister of Commerce and Consumer Affairs Scott Simpson confirmed the reforms landed on by the Government (you can read our articles about these announcements here and here). When announcing the proposed reforms, Minister Simpson noted the Government’s intent to introduce an amendment bill to Parliament before Christmas - with the Bill being introduced this week, the Government has met its timing target.

The Bill - key takeaways

As expected, the proposed reforms announced earlier this year have largely carried over into the Bill, including:

Expanding the scope of the anticompetitive business acquisitions prohibition to cover “creeping acquisitions”, being the acquisition of multiple small competitors that may not raise competition issues in isolation, but do when assessed cumulatively.
Clarifying the “substantial lessening of competition” assessment across all parts of the Commerce Act to include creating, strengthening or entrenching market power.
Allowing the Commerce Commission (Commission) to accept behavioural undertakings to resolve concerns with merger clearance/authorisation applications (at the moment only structural undertakings involving the divestment of shares or assets can be taken into account).
Clarifying what constitutes predatory pricing for the purposes of misuse of market power under section 36.
Introducing a statutory notification regime for certain competitor collaboration which allows parties to proceed on a “no objections” basis.
Allowing the Commission to exempt limited classes of persons or conduct from compliance with the restrictive trade practices and business acquisitions parts of the Commerce Act for 10 years.
Longstop dates for the Commission to make a determination on merger clearances/authorisations (140 and 160 working days respectively), with the ability to extend in 20 working day increments for complex cases, and a requirement to publish full written reasons within 20 working days of a decision.
Giving the Commission powers to suspend completion of business acquisitions and require that the parties apply for clearance/authorisation.
Giving the Commission powers to withhold information provided by third parties in a clearance/authorisation application from disclosure under the Official Information Act.

There were a few surprises in the Bill that warrant a mention - either having not been highlighted in the Government’s announcements in August and September, or taking a slightly different form to what was originally expected. These include:

Repealing section 46, which provides that the restrictive trade practices part of the Commerce Act does not apply to contracts, arrangements or understandings giving effect to business acquisitions. This has been explained in the notes to the Bill on the basis that a party cannot be penalised twice for effectively the same conduct already under the Commerce Act so that section 46 is unnecessary. That said, we see this as having potentially unintended consequences, given that business acquisitions by their nature can raise restrictive trade practices risks (ie a merger of two competitors could raise cartel conduct issues). Even if a party cannot be penalised twice, that would not stop that party being investigated for that conduct and having to go through the time and cost of that.
Giving the Commission the power to conduct industry studies to determine whether procompetitive regulation is warranted. We have not seen a new market study announced this year, following consecutive studies over a number of years, and the Commission has made noises about winding down its market studies branch - so this comes as a surprise, especially for a coalition Government that has stated it is seeking to remove regulatory red tape.
No mention of artificial intelligence after Minister Simpson stated that the Government would be looking to emphasise that it would not be a defence to a breach of the Commerce Act if the breach was the result of the use of AI.

Next steps

There has been no indication of how quickly the Bill will go through Parliament, but we expect that it should be enacted in 2026. We will keep you updated with the Bill’s progress.