Thursday, 30 March 2017

Nature abhors...

...well yes, a vacuum. And that's what we've got.

Sky TV and Vodafone have been told by the Commerce Commission that their marriage is off, but while they haven't been told in full detail why, to keep their appeal rights open they've challenged the refusal in any event, without knowing which of their arguments for the marriage got thrown out or which arguments against their marriage got accepted. And people like Spark who didn't want them married in the first place had to go to court to stop them getting married, although at the time they didn't know that Sky and Vodafone wouldn't be allowed to get married, and even now still don't know exactly why they weren't, though they're happy about it.


If this seems odd to you, you can put it down in part to the Commerce Commission's current practice of announcing decisions, with detailed reasons to follow.

Before I go much further, let me put my hand up and say, I've been there, done that, and used to think the Commission's process was just fine. When I was there it made sense to me, because generally a faster decision (I thought) trumped a detailed decision.

And I've changed my mind, as I said a wee while back. Leaving people in a limbo where something's been decided, but neither those wanting it nor those opposing it know for sure why, is increasingly looking odd to me.

You might well think (in a Francis Urquhart sense) that an economist's view on due process is worth half of five eighths of the proverbial, and maybe that's true. But the other day, in the middle of something else, I got chatting to John Land, the competition lawyer, and I told him that I'd been blogging about this.

And I discovered that he'd come to the same view. A while back, John put in a submission - it was in the context of the Commission updating 'MAGs', the mergers and acquisitions guidelines - arguing that decisions without reasons at the same time was the wrong way to go.

In sum, he had three issues: decisions without reasons could be an error in law (I'm no expert there); the practice unfairly prejudices parties affected (I tend to agree); and, importantly, that "the discipline of finalising the reasons is important in ensuring that the Commission arrives at the correct decision", which sounds right. But don't take my summary of it as gospel: go read the full submission.

And I've also been rethinking the whole speed versus transparency thing. SkyTV/Vodafone came in the Commission's door on June 29 2016, and the decision to decline was announced on February 23 this year, almost eight months later. Stuff/NZME came in on May 27 last year and the decision is due (on the latest timing) on May 2 this year, which is eleven months and a bit.

I'm not bagging anyone over these times, by the way: clearances and (especially) authorisations are complex beasts to start with, and are getting trickier and trickier to determine, for a bunch of reasons, and they need to be done right.

But if these decisions are going to take nine or ten months or so in the first place, is it really worth going into the vacuum territory of decisions without reasons, for the sake of a couple of weeks' quicker announcement?

The other thing that resonates with me, and probably resonates most with anyone who's had to make a really complex judgement call on the net balance of a swathe of expert economist and legal reports, is that you'd want to see the finished product, and kick its tyres, and satisfy yourself that the whole thing hangs together. I usen't feel that way, but now I don't think, were I in their shoes, that I'd want to make the go/no go decision and subsequently hope that the whole recipe comes out of the oven okay later on. And irrespective of the decision-making process,  I'm not sure the uncertainties created for the parties are worth it.

None of this is a big deal. Life will go on either way. And we've got a bunch of more important competition regime issues stacked up and still undecided (section 36, market studies, cease and desist, the shipping lines' exemption, cartels) that should be addressed first. But it wouldn't hurt to tidy this up. It could be win-win all round: a better process for the Commission (arguably better enough to create some efficiencies, so that decisions aren't actually delayed at all), and greater clarity for the parties involved.


  1. Reasons are up:

    1. Belatedly, thank you! I missed your comment - I hand't checked it out because I'd assumed without reading it that it was another spam one (like two others on this post, which I've deleted). I appreciate the heads up


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