New Zealand's competition law is set for its most significant overhaul in years. The Commerce Act reform bill has cleared its Select Committee hurdle and is heading for a mid-2026 pass, with meaningful changes to merger control, predatory pricing rules, and enforcement tools that businesses involved in acquisitions or market-sensitive conduct should be across. Read this article to find out what the key changes are and why they matter.

The Parliamentary Select Committee has recently recommended that the Commerce (Promoting Competition and Other Matters) Amendment Bill be passed, but in a narrower form. While some proposals have been pared back, the Bill still signals significant change to New Zealand’s competition law settings, particularly for mergers, statutory notifications, confidentiality, and enforcement.

The Economic Development, Science and Innovation Committee (Select Committee) has reported back on the Commerce (Promoting Competition and Other Matters) Amendment Bill (Bill) following 80 written and 21 oral submissions. It has recommended, by majority, that the Bill be passed in a narrower form than originally proposed.

The Select Committee’s report is a key development on the road to Commerce Act reform. We have reported on previous developments, including on the Government’s review of the Commerce Act, the reforms landed on by the Government in August and September 2025, and the introduction of the Bill.

Why this matters

Although the Bill has been pared back, the remaining reforms still represent a significant development in New Zealand’s competition law settings.

We cover below the Select Committee’s key recommendations, which focus on:

1. retaining the predatory pricing test;
2. strengthening the merger control framework;
3. refining the new statutory notification regime;
4. narrowing the Bill’s proposed confidentiality protections; and
5. expanding enforcement tools and refining market study powers.

The Select Committee has not changed the clauses in the Bill relating to:

• the collaborative activities clearance application process;
• the Commission’s call-in powers for mergers;
• how the Commission handles Official Information Act 1982 requests; or
• the ability for the Commission to waive application fees in some situations.

Predatory pricing

The Select Committee has retained the objective, cost-based test for predatory pricing. Pricing by a company with substantial market power will be predatory where it is sustained below average variable cost or average avoidable cost, or where it sits above those levels but below long-run average incremental cost or average total cost and is pursued for an exclusionary purpose (eg, to deter entry or exclude competitors). Recoupment is not required but may be considered.

Short-term promotional or below-cost pricing (up to three months in any 12-month period), including one-off discounts or pricing errors, will not be captured by the test unless part of a sustained pattern. The clause also clarifies key cost concepts and preserves the broader reach of the Bill, meaning pricing outside these thresholds may still be challenged under other provisions.

Merger regime

The Select Committee has made five key recommendations to strengthen the merger and acquisitions regime proposed in the Bill:

1. Suspension power: The Commission will be able to suspend acquisitions for up to 40 working days if necessary to protect competition while it assesses an acquisition, and require the applicant to safeguard the business and assets during the suspension (including following any Commission‑specified steps).
2. Pausing statutory timelines: The Commission will be able to pause statutory timeframes for making a decision on a clearance application while awaiting material information from a party or while the acquisition is being considered by an overseas regulator.
3. Expanded SLC concept: “Substantial lessening of competition” (SLC) will include “creating, strengthening, or entrenching a substantial degree of power in the market” to capture acquisitions of nascent or innovative rivals to slow the rival’s product development, but this will only apply to mergers and not other parts of the Commerce Act to avoid chilling legitimate competitive conduct.
4. Creeping acquisitions: The Commission will be able to consider prior acquisitions when assessing a merger to address “creeping acquisitions”, but the lookback will be limited to acquisitions involving the same or closely competing goods or services.
5. Behavioural undertakings: The Commission will be able to accept behavioural undertakings from the merged party if structural remedies are disproportionate or not reasonably practicable.

The Select Committee has also made recommendations aiming to improve the efficiency and clarity of the merger and acquisition regime:

1. Defined decision timelines: The Bill provides more prescriptive decision timeframes for clearances and authorisations, with extensions/suspensions governed by statutory tests relating to the complexity of the analysis, not the transaction itself.
2. Merger carve-out retained: The Select Committee recommended that the Bill retains the existing carve‑out stating that mergers will be assessed under the SLC test for mergers in section 47, and not the restrictive trade practices provisions of the Commerce Act as well.  

Statutory notification regime

The Bill introduced a “fast-track” alternative to the authorisations/clearance regime for conduct that is likely to be in the public interest or is unlikely to substantially lessen competition. This is a “notify and proceed unless stopped” regime, giving businesses faster comfort for low-risk conduct.  

In practice, businesses will be able to notify the Commission that the proposed conduct falls within a prescribed category (codified in Schedule 8 of the Act). If the Commission does not object or issues a “no-objection notice”, the conduct will effectively be authorised for a default period of three years. The type of low-risk conduct covered by this would include collective bargaining (where the value of goods or services supplied or acquired will be no more than NZ$3 million per party each year) and resale price maintenance.

The Select Committee has made three key recommendations in relation to the statutory notification regime proposed in the Bill:

1. Schedule 8 conduct: The Minister can add conduct to Schedule 8 if the effects of the conduct are predictable.
2. Rescission of “no-objection” notice: The Commission can issue and later rescind a no‑objection notice on 30 working days’ notice, including reasons for rescission. The Commission must give the notifying party (or other interested party) reasonable opportunity to submit to the Commission on the rescission and the Commission must have regard to any submissions.
3. Scope of appeal rights: Commission decisions regarding the statutory notification regime can be appealed to the High Court on points of law, excluding appeals for class exemptions.

Confidentiality protections

The Select Committee scaled back the confidentiality protections afforded by the Bill for information provided to the Commission, but the protections remain stronger than under the current Act. In particular:

1. Confidentiality orders (duration and justification): The original Bill enabled the Commission to make a time-limited confidentiality order prohibiting the disclosure of specific information related to an inquiry, investigation or merger assessment which would override the Official Information Act, but the Select Committee reduces the maximum duration of this order from 10 to 5 years. Relatedly, the Select Committee recommended that confidentiality orders extending beyond the end of a matter must be actively justified, requiring the Commission to consider the risk of harm and principles of transparency, accountability, and public trust.
2. Statutory protection period: The Bill had proposed a default statutory protection period for confidential information of 10 years (with extensions in defined circumstances) – but the Select Committee reduces this to 5 years, with any extensions capped at 5‑year increments.

Enforcement and market studies

The Select Committee has amended the Bill so that:

1. Corrective action orders: The High Court can issue corrective action orders for breaches of the restrictive trade practices provisions of the Commerce Act on application by either the Commission or private parties.
2. Expanded injunction powers: The High Court has the power to grant an injunction (mandatory or prohibitory) for breaches of the restrictive trade practices provisions of the Commerce Act on application by the Commission or any other person, with performance injunctions also available.
3. Market studies powers clarified: While the Bill granted the Commission standalone powers to conduct market studies and recommend pro-competition regulation as a result, the Select Committee has removed the standalone power. Instead, it has clarified that the Commission can recommend pro‑competition regulations under its existing market study functions.

Next steps

The Bill will now return to the House of Representatives for its second and third readings before receiving Royal assent. The Government has indicated that it expects the reforms to pass in mid-2026, with all changes in force by the end of 2026.

If you would like to discuss how the reported-back Bill could affect a proposed transaction, supply arrangements, or your wider competition law compliance settings, please get in touch with one of our experts.

Special thanks to Jenna Bernstein for her assistance in preparing this update.