Wednesday 8 September 2021

Sterny McSternface

Something's set them off. 

I've just noticed that at the end of last month the Commerce Commission came out with a stern "anti-collusion reminder to businesses supplying essential services". There was a nod towards the exigencies of Covid - "some businesses able to operate under level 4 restrictions may need to cooperate to ensure New Zealanders continue to be supplied with essential goods and services" - but the bulk of the message, and its clear overall tone, was that some businesses could have been tempted to overstep the mark. 

When the "reminder" includes how whistle blowers can dob in a cartel, and finishes up with a paragraph pointing out that cartel behaviour is now a criminal offence, you get the strong feeling that the Commission is not a happy bunny.

Which brings us back to an oddity of the first lockdown in 2020 ("What if they threw a party..."). 

Then - and again now - there were all sorts of Covid-related stresses on businesses: on supply chains, on resources, on lenders and landlords trying to respond to the predicaments of their lockdown customers. In many cases, cooperation would have been in the public interest: hospitals, for example, might agree on which patients should go where, to help manage capacity for Covid ICU beds. Supermarkets might jointly use scarce lorries to get stuff into the shops.

In Australia, the ACCC got lots of requests along those lines, and was, rightly, authorising herds of them, and, importantly, it was doing it very quickly to meet the urgent need. It wasn't being silly about it - the authorisations  tended to come with controls to make sure they were limited to the Covid issues at hand - but it was chucking them out the window at a rapid rate. Last month, for example, it rolled over its interim authorisation of  "temporary and limited coordination between the ABA [Australian Banking Association] and participating banks to defer loan repayments and waive certain banking fees for small businesses impacted by the pandemic". Absolutely.

Normally, our Commission can't do these quick fixes (daftly, its power to issue provisional authorisations was taken away years back, for reasons nobody can now recall). But, while there is an "epidemic period", as there is now, it can, under emergency legislation whacked through last year (details here).

But here's the thing. 

Nobody's turned up and asked for one. Which is distinctly odd. We have had the same stresses the Aussies had, but lots of authorisations there, none here. Qué?

I hope it's not because businesses think the Commission will be too slow, and by the time they get the slip of paper the bananas will have rotted on the wharf. And you can see why they might think that: in the normal course of affairs, the Commission doesn't exactly sprint through authorisations. Yes, they can be complex propositions where estimating the benefits and costs is hard, but even in relatively straightforward ones - like the HP one it's just given the green light to - it takes its own time. It had the issues identified in a commendably quick fortnight. And then it thought about them for four months.

It doesn't help that we're in a chicken and egg situation: without evidence of a quick response, businesses may flag away applying, but if there are no applications, the Commission can't show it can indeed hop to it when needs must.

Or maybe it's just the Kiwi way: we tend to be relatively informal and to muck in even before any contract is signed, and maybe there is socially useful cooperation going on and to hell with the paperwork. 

Let's hope it's one of those relatively benign reasons. Because if some businesses have used Covid to price fix, then they deserve anything the Commission throws at them - not to mention the risk of a PR disaster.

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