Reforms target unfair tactics like creeping acquisitions, predatory pricing
Nicola Willis, economic growth minister, and Scott Simpson, commerce and consumer affairs minister, have announced that the government is planning significant reforms to the Commerce Act 1986 for the first time in almost 20 years.
In a news release, the government said it expects to introduce the amendments to Parliament before Christmas this year and pass them by mid-2026.
Willis and Simpson shared that the proposed changes aim to provide the public with better safeguards and give businesses more certainty and reliability while ensuring that markets are fair.
According to the news release, the reforms will:
The government said the amendments aim to:
“Competition is a key driver of growth, innovation and productivity,” Willis said in the news release. “Consumers and businesses thrive when markets are open and fair.”
Willis said the currently outdated and unclear rules have caused only a few players to dominate some of the country’s crucial markets.
In its news release, the government said the contemplated changes seek to strengthen and better structure New Zealand’s Commerce Commission and ensure it can issue timelier and more transparent decisions.
“An independent review found the Commerce Commission has outgrown its current structure, with the board handling both governance and regulatory decisions,” Simpson said. “By separating these functions, the Commission will be able to deliver better outcomes for consumers.”
Simpson added that the reforms aim to help the Commerce Commission:
“Importantly, these changes lift the bar on which mergers can proceed,” Simpson said in the government’s news release. “This will prevent dominant firms entrenching their power and give businesses and consumers more choice, sharper prices and fairer markets.”
In a news release, the Commerce Commission welcomed the planned amendments to its governance structure, as well as the measures to promote competition and discourage creeping acquisitions and predatory pricing.
Dr John Small, the Commerce Commission’s chair, said the changes will help the agency hasten and deepen its direction, offer New Zealanders better quality and options, focus on the future, and prepare for competition challenges to come.
“We’re pleased the recent review of the Commission’s governance and effectiveness and the Government’s response to it confirmed we are a strong and trusted organisation,” Small said in the Commerce Commission’s news release. “We welcome the review and its recommendations.”
“The reforms represent some of the most significant changes to the Commerce Act, and the Commission, in decades,” according to a news release from Russell McVeagh. “There could be major implications (some positive, some negative) for M&A activity, discounting by large businesses, and collaboration with competitors.”
