Monopoly Watch New Zealand is demanding the Select
Committee halt the progress of the Commerce (Promoting
Competition and Other Matters) Amendment Bill and return
it to MBIE. As it stands, this legislation is not a
“reform”—it is a surrender.
After years of “market
studies” that diagnosed a terminal lack of competition in
our supermarkets, banks, and energy sectors, the Government
had a chance to perform surgery. Instead, they have handed
the patient a placebo while letting the lobbyists write the
prescription.
1. The “Behavioural Remedy”
Trap: A Monopolist’s Get-Out-of-Jail-Free
Card
The most egregious “weakening” of our
law is the introduction of behavioural
undertakings for mergers.
For decades, New
Zealand required structural remedies
(selling off assets) to fix anti-competitive mergers. If a
deal hurt competition, you had to break it up. This Bill
changes the game. The Commission can now accept “promises”
from big companies to “behave nicely” instead of forcing
them to sell assets.
History shows these promises are
impossible to monitor and easy to break. We don’t want
“monopolists on their best behaviour”; we want a market
where they have to compete to survive. This is a massive win
for the Big Law firms and their clients, who can now “fudge”
their way through mergers that should be dead on
arrival.
2. The “Fast-Track” for Cartels: “No
Objections” is No Protection
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The new
statutory notification regime allows
businesses to engage in “collaborative conduct” (often just
a polite word for cartel-lite behaviour) and proceed if the
Commission doesn’t object within 45 days.
In a world
where the Commerce Commission is chronically
under-resourced, a 45-day “clock” is a gift to industry
associations. It forces a “silence equals consent” model
that will let complex, price-distorting collaborations slip
through the net while the Commission is still reading the
fine print.
4. The AI and Predatory Pricing
Vacuum
Despite MBIE’s early promises, the
version of the Bill before the Select Committee is toothless
on the 21st-century’s biggest
threats:
- AI-Driven Pricing:
There is no robust framework to stop the “algorithmic
collusion” now standard in retail and
insurance.
4. Predatory pricing:
Accountability Dies in Darkness
- The Bill
fails to introduce any legislation which would
protect challengers from competitors as predatory pricing
definition is so weak and childish - The Big Law
firms confused the MBIE and pushed back on any meanginful
reform on a critical issue
here
The Monopoly Watch
Verdict
This Bill is a waste of taxpayer
resources. It tinkers with the plumbing of the Commerce Act
while the house is on fire. The legal profession, draped in
their Prada shoes and Birken handbags, may celebrate the
“flexibility” and “certainty” this Bill provides their
clients. But for the Kiwi family paying the highest grocery
prices in the OECD, this Bill provides nothing but more of
the same.
Select Committee: Do your
job. Step up, work in a bi-partisan manner, and
deliver legislation that creates price and quality
competition. Stop the “tinkering” and start the
“restructuring.”
Send it
back.
Summary of “Weakening” Changes
for your notes:
- Shift from
Structural to Behavioural Remedies: Moves from
“sell it” to “promise to be good” (major win for
incumbents). - Statutory Notification (45-day
rule): Creates a “fast track” for anti-competitive
collaboration that relies on the Commission’s inability to
react in time. - Class Exemptions:
Allows the Commission to exempt entire categories of conduct
from the Act, creating permanent “safe harbours” for vested
interests. - Watered-down AI
oversight: Fails to address how dominant firms use
data and algorithms to entrench market
power.
Monopoly Watch will continue to engage
with its “what it will take to fix “ checklist
with Wellington
officials
