Objectives of the changes
The Commerce Act 1986 seeks to promote competition in markets for the long-term benefit of consumers. These changes will support businesses to compete fairly on their merits and for the Commerce Commission to take action against anti-competitive conduct.
Section 36 of the Commerce Act is designed to prevent businesses with substantive market power from suppressing competition. The current test for determining whether a business has acted anti-competitively is costly and difficult to enforce, which reduces incentives to comply with the law.
The Government is going to strengthen the law to prohibit firms with market power from engaging in conduct that substantially lessens competition, regardless of whether they would have done the same thing if they didn’t have market power.
The changes will also remove provisions in the Commerce Act that shield some types of intellectual property-related conduct from being examined under competition law. The vast majority of intellectual property-related conduct is unlikely to raise competition concerns. However, the Government believes that when such conduct does raise concerns, it should be able to be assessed under competition law like any other type of conduct.
Other amendments to the Commerce Act include:
- increasing penalties for businesses engaging in anti-competitive mergers
- technical changes to the treatment of anti-competitive covenants
- increasing the maximum number of Commerce Commissioners from six to eight to reflect the Commission’s growing responsibilities in recent years
- making it easier for the Commerce Commission to cooperate with other domestic agencies by sharing information it holds, subject to appropriate safeguards.
A bill will be introduced early in 2021, as Parliamentary scheduling allows.
You can find out more about the changes by reading the following documents: