Thursday, 7 February 2019

Get ready to write in

Want to have a say on competition policy and fair business practices? Then you're going to be a busy chap or chapess over the next few weeks.

First, though it went largely unreported in the summer news doldrums, the Minister of Commerce Kris Faafoi has moved the s36 debate along, and now thinks that we should emulate the Aussies and adopt their legislative framework (here's his press release and here's MBIE's announcement about the consultation process, which runs to April 1).

I'm quietly impressed by the reforms the Minister is pushing along, which is maybe just a nice way of saying he's doing what I would like to see. But in any event he's got on with two improvements to our competition regime. Earlier he'd successfully pushed for the Commerce Commission having a power to initiate market studies (the previous government had wanted to make it only at Ministerial direction, as you can see at recommendation 'm' on p20 of the Cabinet paper) and now he's running with reform of s36, where the previous Minister had proposed kicking the can down the road apiece (recommendation 'k', ditto).

s36 has proved to be a rather divisive topic: the Cabinet paper had correctly said (p9), "This is a contentious area, with stakeholders presenting polarised views on the case for change". As readers will know I've been on the side of changing our current wording
"A person that has a substantial degree of power in a market must not take advantage of that power for the purpose of" doing various bad anti-competitive stuff
to the Aussies' wording in their equivalent, s46 of their Act:
"A corporation that has a substantial degree of power in a market must not engage in conduct that has the purpose, or has or is likely to have the effect, of substantially lessening competition"
That junks the whole "take advantage" limb of our s36, which has led our jurisprudence down all sorts of rabbit-holes (none of them the right one). And it introduces "effects", which in principle ought to be a bit more productive to examine than "purpose", which is more nebulous. Plus it aligns both sides of the Tasman, an incidental but bankable benefit. Fire up your arguments if you want to be heard on s36 before the curtain drops on April 1.

If you've got an interest in competitive markets, you'll also likely want to get your tuppenceworth into the MBIE consultation process looking at unfair commercial practices (all the goop is here). Views due by February 28. Don't have strong views myself at the mo, though I rather like the way the Aussie version of our Commerce Act allows for industry codes of practice (part IVB of their Competition and Consumer Act). It seems to be helpful where, for example, their are imbalances of bargaining power between (say) the Aussie supermarket duopoly and their suppliers. You can explore the Aussie Food and Grocery Code here.

And finally if you're the complete competition submission wonk, the Commission is also consulting on its merger clearance process (details here, February 28 deadline again).

Speaking of competition policy tragics, my mate Ed Willis (University of Auckland Law School) and I shook off our summer stupor and in a miracle of last-minute productivity put in a submission on the draft market studies process guidelines the Commission issued last December. The submissions aren't on the Commission's website yet, but when they are (if anyone else actually defied the heatwave to submit on procedural issues), our pi├Ęce de wonkerie argued for more clarity round the criteria for launching a study, more emphasis on the need for efficiency in completion, and more safeguards around the use of information gathered, how it is shared, and how it is treated under the OIA. We also questioned whether market studies should be seen as another enforcement tool, as we felt the Commission was suggesting: that, in our view, was never Parliament's intention.

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