Stuff the business backlash, the Commerce Commission is a joke

Richard Harman from Politik reports that big business is feeling a bit hurty over proposed changes to the Commerce Commission by Paul Goldsmith.

Though Commerce and Consumer Affairs Minister Paul Goldsmith is playing it down, a Government review of competition law that he announced yesterday has the potential to make radical changes that could affect some of New Zealand’s largest companies.

Mr Goldsmith describes the review as a “health check” on the current law.

But accompanying documentation from the Ministry of Business, Innovation and Employment says the current law, administered by the Commerce Commission.

The Ministry argues that it has not been working satisfactorily because it is:

  • failing to punish anti-competitive conduct by powerful firms and
  • too complex to allow for cost-effective and timely application,

Commenting on the announcement, the law firm Chapman Tripp, says the prospect of amendments to the Commerce Act will have implications for the commercial and compliance strategies of New Zealand’s most strategically important companies.

Boo hoo, the vested interests just love the current arrangements with the Commerce Commission. Compared to the ACCC in Australia the Commerce Commission is a toothless tiger that has got fat on processed meat.

You only have to look at the recent Countdown case to see just how toothless they were, when despite more than 100 suppliers providing evidence they decided there was nothing to see there and moved on.

In recent years the Commission’s decisions have been dominated by companies in the electricity and gas industries but big name firms like Fonterra, SkyCity and Vodafone have also found themselves the subject of Commerce Commission attention.

Mr Goldsmith told POLITIK the review had been first proposed two ears ago but had been delayed but the Australians looking at their competition laws – which New Zealand’s are aligned with under the CER.

He said it was a question of asking whether our law was still appropriate and “have we got it right”.

And so the Government is now seeking feedback on the issues paper which will be placed on the MBIE website.

But does the review indicate that the legislation and process up till now has been ineffective?

“That’s the question we are testing,” he said.

“Has it or hasn’t it been?

“The hunch that has been put forward in the issues appear is that on the face of it there haven’t been all that many successful cases.

“So that’s the question we are asking.

“Is it too difficult??

“Is it too complicated and hard to predict and if so, what would be a better alternative?”

Mr Goldsmith said the Government would look at feedback to the paper over the next few months and then make a decision whether to legislate to change the Commerce Act.

“the hurdle that will have to be crossed is whether there is a strong case that the current regime is not providing an effective deterrent against misuse of market power and that’s still an open question and so we need to some strong evidence of that and then secondly is there a better alternative.”

Mr Goldsmith the debate would have to consider whether the evidential burden of proof was set too high or whether New Zealand went to an effects based regime such as is employed in the European Union.

“That would be a very substantial change and we wouldn’t be contemplating that without some serious thought beforehand.”

This is precisely the sort of legislation that Paul Goldsmith is good at, and the sort of politics he is good at too. Just don’t ever put him in charge of a social services ministry.

Seriously though Goldsmith is right at looking into strengthening the role of the Commerce Commission.

Tell the vested and often conflicted interests at the top end to go get stuffed.


– Politik

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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.

To read Cam’s previous articles click on his name in blue.