Context
In May 2006, the Minister of Commerce announced a review of the regulatory control provisions and the authorisation and clearance provisions of the Commerce Act 1986, to ensure that the provisions in these Parts of the Act are working efficiently and effectively. This terms of reference outlines the scope and the timeframes for the stream relating to the authorisation and clearance provisions. A separate terms of reference has been prepared for the stream relating to the regulatory control provisions.
Sections 58-69B of Part 5 of the Commerce Act contain provisions relating to the authorisation and clearance of business acquisitions and restrictive trade practices. Authorisation is able to be sought for most types of practices and business acquisitions substantially lessening competition, if sufficient benefits to the public are shown that outweigh any detriments arising from the practice. Clearance is able to be sought for business acquisitions that may or may not substantially lessen competition.
The Review will be led by the Ministry of Economic Development, which is responsible for monitoring New Zealand's competition policy framework and operation of the Commerce Act 1986, with a view to ensuring that it supports effective and competitive markets for the long-term benefits of consumers within New Zealand.
It is generally accepted that New Zealand's clearance and authorisation processes are of a high standard. The Review will draw on the experiences of regulators and practitioners to further improve the authorisation and clearance processes.
The Commerce Act was substantially amended in 2001, predominantly to enhance the Part 2 and 3 competition thresholds and deterrents against anticompetitive behaviour. This Review will not re-examine the Part 2 and 3 thresholds, given that they were substantively reviewed and amended recently.
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