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Legislation

Commerce Act 1986

 

Summary

Some key provisions of the New Zealand Commerce Act have been extracted below (please note that the Act comprises more than 100 provisions and those extracted are highly selective). For the full set of provisions visit:

New Zealand Legislation

Commerce Commission, New Zealand

 

Objects clause

Unlike the Australian objects clause, which refers to 'public interest', the NZ Commerce Act makes explicit reference consumer welfare (inserted 2001):

Section 1A Purpose

The purpose of this Act is to promote competition in markets for the long-term benefit of consumers within New Zealand.

 

Practices substantially lessening competition

Section 27 Contracts, arrangements, or understandings substantially lessening competition prohibited

(1) No person shall enter into a contract or arrangement, or arrive at an understanding, containing a provision that has the purpose, or has or is likely to have the effect, of substantially lessening competition in a market.

(2) No person shall give effect to a provision of a contract, arrangement, or understanding that has the purpose, or has or is likely to have the effect, of substantially lessening competition in a market.

(3) Subsection (2) applies in respect of a contract or arrangement entered into, or an understanding arrived at, whether before or after the commencement of this Act.

(4) No provision of a contract, whether made before or after the commencement of this Act, that has the purpose, or has or is likely to have the effect, of substantially lessening competition in a market is enforceable.

Section 28 Covenants substantially lessening competition prohibited

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Section 29 Contracts, arrangements, or understandings containing exclusionary provisions prohibited

(1) Subject to subsection (1A), for the purposes of this Act, a provision of a contract, arrangement, or understanding is an exclusionary provision if -

(a) it is a provision of a contract or arrangement entered into, or understanding arrived at, between persons of whom any 2 or more are in competition with each other; and

(b )it has the purpose of preventing, restricting, or limiting the supply of goods or services to, or the acquisition of goods or services from, any particular person or class of persons, either generally or in particular circumstances or on particular conditions, by all or any of the parties to the contract, arrangement, or understanding, or if a party is a body corporate, by a body corporate that is interconnected with that party; and

(c) the particular person or the class of persons to which the provision relates is in competition with 1 or more of the parties to the contract, arrangement or understanding in relation to the supply or acquisition of those goods or services.

(1A) A provision of a contract, an arrangement, or an understanding that would, but for this subsection, be an exclusionary provision under subsection (1) is not an exclusionary provision if it is proved that the provision does not have the purpose, or does not have or is not likely to have the effect, of substantially lessening competition in a market.

(2) For the purposes of subsection (1)(a) and (c), a person is in competition with another person if that person or any interconnected body corporate is, or is likely to be, or, but for the relevant provision, would be or would be likely to be, in competition with the other person, or with an interconnected body corporate, in relation to the supply or acquisition of all or any of the goods or services to which that relevant provision relates.

(3) No person shall enter into a contract, or arrangement, or arrive at an understanding, that contains an exclusionary provision.

(4) No person shall give effect to an exclusionary provision of a contract, arrangement, or understanding.

(5)Subsection (4) applies to an exclusionary provision of a contract or arrangement made, or understanding arrived at, whether before or after the commencement of this Act.

(6) No exclusionary provision of a contract, whether made before or after the commencement of this Act, is enforceable.

 

Price fixing

Section 30 Certain provisions of contracts, etc, with respect to prices deemed to substantially lessen competition

(1) Without limiting the generality of section 27, a provision of a contract, arrangement, or understanding shall be deemed for the purposes of that section to have the purpose, or to have or to be likely to have the effect, of substantially lessening competition in a market if the provision has the purpose, or has or is likely to have the effect of fixing, controlling, or maintaining, or providing for the fixing, controlling, or maintaining, of the price for goods or services, or any discount, allowance, rebate, or credit in relation to goods or services, that are—

(a) supplied or acquired by the parties to the contract, arrangement, or understanding, or by any of them, or by any bodies corporate that are interconnected with any of them, in competition with each other; or

(b) resupplied by persons to whom the goods are supplied by the parties to the contract, arrangement, or understanding, or by any of them, or by any bodies corporate that are interconnected with any of them in competition with each other.

(2) The reference in subsection (1)(a) to the supply or acquisition of goods or services by persons in competition with each other includes a reference to the supply or acquisition of goods or services by persons who, but for a provision of any contract, arrangement, or understanding would be, or would be likely to be, in competition with each other in relation to the supply or acquisition of the goods or services.

Section 31 Joint venture pricing exempt from application of section 30

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Section 32 Certain recommendations as to prices for goods and services exempt from application of section 30

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Section 33 Joint buying and promotion arrangements exempt from application of section 30

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Section 34 Certain provisions of covenants with respect to prices deemed to substantially lessen competition

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Taking advantage of market power

Section 36 Taking advantage of market power

(1) Nothing in this section applies to any practice or conduct to which this Part applies that has been authorised under Part 5.

(2) A person that has a substantial degree of power in a market must not take advantage of that power for the purpose of—

(a) restricting the entry of a person into that or any other market; or

(b) preventing or deterring a person from engaging in competitive conduct in that or any other market; or

(c) eliminating a person from that or any other market.

(3) For the purposes of this section, a person does not take advantage of a substantial degree of power in a market by reason only that the person seeks to enforce a statutory intellectual property right, within the meaning of section 45(2), in New Zealand.

(4) For the purposes of this section, a reference to a person includes 2 or more persons that are interconnected.

Section 36A Taking advantage of market power in trans-Tasman markets

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Section 36B Purposes may be inferred

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Resale price maintenance

Section 37 Resale price maintenance by suppliers prohibited

(1) No person shall engage in the practice of resale price maintenance.

(2) For the purposes of this section a person engages in the practice of resale price maintenance if that person (in this section referred to as the supplier) does any of the acts referred to in subsection (3).

(3) The acts referred to for the purposes of subsection (2) are—

(a) the supplier making it known to another person that the supplier will not supply goods to the other person unless the other person agrees not to sell those goods at a price less than a price specified by the supplier:

(b) the supplier inducing, or attempting to induce, another person not to sell, at a price less than a price specified by the supplier, goods supplied to the other person by the supplier or by a third person who, directly or indirectly, has obtained the goods from the supplier:

(c) the supplier entering or offering to enter into an agreement, for the supply of goods to another person, where one of the terms is or would be that the other person will not sell the goods at a price less than a price specified, or that would be specified, by the supplier:

(d) the supplier withholding the supply of goods to another person for the reason that the other person—

(i) has not agreed to the condition mentioned in paragraph (a); or

(ii) has sold, or is likely to sell, goods supplied to him by the supplier, or goods supplied to him by a third person who, directly or indirectly, has obtained the goods from the supplier, at a price less than a price specified by the supplier as the price below which the goods are not to be sold:

(e) the supplier withholding the supply of goods to another person for the reason that a third person who, directly or indirectly, has obtained, or wishes to obtain, goods from the other person—

(i) has not agreed not to sell those goods at a price less than a price specified by the supplier; or

(ii) has sold or is likely to sell goods supplied or to be supplied to that third person, by the other person, at a price less than a price specified by the supplier as the price below which the goods are not to be sold.

(4) For the purposes of subsection (3),—

(a) where the supplier makes it known, in respect of any goods, that the price below which those goods are not to be sold is a price specified by another person in respect of those goods, or in respect of goods of a like description, that price shall be deemed to have been specified, in respect of the first-mentioned goods, by the supplier:

(b) where a set form, method, or formula is specified by or on behalf of the supplier and a price may be ascertained by calculation from, or by reference to, that set form, method, or formula, that price shall be deemed to have been specified by the supplier:

(c) where the supplier makes it known, in respect of any goods, that the price below which those goods are not to be sold is a price ascertained by calculation from or by reference to a set form, method, or formula specified by another person in respect of those goods, or in respect of goods of a like description, that price shall be deemed to have been specified, in respect of the first-mentioned goods, by the supplier:

(d) where the supplier makes a statement to another person of a price that is likely to be understood by that person as the price below which goods are not to be sold, that price shall be deemed to have been specified by the supplier as the price below which the goods are not to be sold:

(e) anything done by a person acting on behalf of, or by arrangement with, the supplier shall be deemed to have been done by the supplier.

(5) For the purposes of this section, sale includes advertise for sale, display for sale, and offer for sale, and sell, selling, and sold have corresponding meanings.

Section 38 Resale price maintenance by others prohibited

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Section 39 Recommended prices

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Section 40 Withholding the supply of goods

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Section 41 Preventing the supply of goods

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Section 42 Special evidentiary provisions in respect of certain resale price maintenance practices

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Section 43 Statutory exceptions

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Section 44 Other exceptions

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Section 45 Exceptions in relation to intellectual property rights

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Section 46 Saving in respect of business acquisitions

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Business acquisitions

Section 47 Certain acquisitions prohibited

(1) A person must not acquire assets of a business or shares if the acquisition would have, or would be likely to have, the effect of substantially lessening competition in a market.

(2) For the purposes of this section, a reference to a person includes 2 or more persons that are interconnected or associated.

(3) For the purposes of this section, a person is associated with another person if that person is able, whether directly or indirectly, to exert a substantial degree of influence over the activities of the other.

(4) A person is not able to exert a substantial degree of influence over the activities of another person for the purposes of subsection (3) by reason only of the fact that—

(a) those persons are in competition in the same market; or

(b) one of them supplies goods or services to the other.

 

Authorisations and clearances: Restrictive trade practices

58 Commission may grant authorisation for restrictive trade practices

(1) A person who wishes to enter into a contract or arrangement, or arrive at an understanding, to which that person considers section 27 would apply, or might apply, may apply to the Commission for an authorisation to do so and the Commission may grant an authorisation for that person to enter into the contract or arrangement, or arrive at the understanding.

(2) A person who wishes to give effect to a provision of a contract or arrangement or understanding to which that person considers section 27 would apply, or might apply, may apply to the Commission for an authorisation to do so, and the Commission may grant an authorisation for that person to give effect to the provision of the contract or arrangement or understanding.

(3) A person who wishes to require the giving of, or to give, a covenant to which that person considers section 28 would apply, or might apply, may apply to the Commission for an authorisation to do so, and the Commission may grant an authorisation for that person to require the giving of, or to give, the covenant.

(4) A person who wishes to carry out or enforce a covenant to which that person considers section 28 would apply, or might apply, may apply to the Commission for an authorisation to do so, and the Commission may grant an authorisation for that person to carry out or enforce the covenant.

(5 )A person who wishes to enter into a contract or arrangement, or arrive at an understanding to which that person considers section 29 would apply, or might apply, may apply to the Commission for an authorisation for that person to enter into the contract or arrangement or arrive at the understanding.

(6) A person who wishes to give effect to an exclusionary provision of a contract or arrangement or understanding to which that person considers section 29 would apply, or might apply, may apply to the Commission to do so, and the Commission may grant an authorisation for that person to give effect to the exclusionary provision of the contract or arrangement or understanding.

(7) A person who wishes to engage in the practice of resale price maintenance to which that person considers section 37 would apply, or might apply, may apply to the Commission for an authorisation to do so, and the Commission may grant an authorisation for that person to engage in the practice.

(8) A person who wishes to do an act to which that person considers section 38 would apply, or might apply, may apply to the Commission for an authorisation to do so, and the Commission may grant an authorisation for that person to do that act.

Sections 58A - 65 [related provisions]

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Authorisations and clearances: Business acquisitions

Section 66 Commission may give clearances for business acquisitions

(1) A person who proposes to acquire assets of a business or shares may give the Commission a notice seeking clearance for the acquisition.

(2) Subsections (1), (2)(a) and (b), (4), and (5) of section 60 shall apply in respect of every notice given under subsection (1) as if the notice was an application under section 58.

(3) Within 10 working days after the date of registration of the notice, or such longer period as the Commission and the person who gave the notice agree, the Commission shall either—

(a) if it is satisfied that the acquisition will not have, or would not be likely to have, the effect of substantially lessening competition in a market, by notice in writing to the person by or on whose behalf the notice was given, give a clearance for the acquisition; or

(b) if it is not satisfied that the acquisition will not have, or would not be likely to have, the effect of substantially lessening competition in a market, by notice in writing to the person by or on whose behalf the notice was given, decline to give a clearance for the acquisition.

(4) If the period specified in subsection (3) expires without the Commission having given a clearance for the acquisition and without having given a notice under subsection (3)(b), the Commission shall be deemed to have declined to give a clearance for the acquisition.

(5) A clearance given under subsection (3) expires—

(a) 12 months after the date on which it was given; or

(b) in the event of an appeal being made against the determination of the Commission giving the clearance, and the determination being confirmed by the court, 12 months after the date on which the determination is confirmed.

Section 67 Commission may give authorisations for business acquisitions

(1) A person who proposes to acquire assets of a business or shares may give the Commission a notice seeking an authorisation for the acquisition.

(2) Subsections (1), (2)(a) and (b), (4), and (5) of section 60 shall apply in respect of every notice given under subsection (1) as if the notice was an application under section 58.

(3) Within 60 working days after the date of registration of the notice, or such longer period as the Commission and the person who gave the notice agree, the Commission shall—

(a) if it is satisfied that the acquisition will not have, or would not be likely to have, the effect of substantially lessening competition in a market, by notice in writing to the person by or on whose behalf the notice was given, give a clearance for the acquisition; or

(b) if it is satisfied that the acquisition will result, or will be likely to result, in such a benefit to the public that it should be permitted, by notice in writing to the person by or on whose behalf the notice was given, grant an authorisation for the acquisition; or

(c) if it is not satisfied as to the matters referred to in paragraph (a) or paragraph (b), by notice in writing to the person by or on whose behalf the notice was given, decline to give a clearance or grant an authorisation for the acquisition.

(4) If the period specified in subsection (3) expires without the Commission having given a clearance or having granted an authorisation or having declined to do so, the Commission shall be deemed to have declined to give a clearance or grant an authorisation.

(5) The Commission shall state in writing its reasons for a determination made by it under subsection (3).

(6) A clearance given or an authorisation granted under subsection (3) expires—

(a) 12 months after the date on which it was given or granted; or

(b) in the event of an appeal being made against the determination of the Commission giving the clearance or granting the authorisation, and the determination of the Commission being confirmed by the court, 12 months after the date on which the determination is confirmed.

Sections 68-69B [related provisions]

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