• Home
• Regulation
• Competition Policy
• Commerce Act Pts 4/4A/5 Review
• Authorisation and Clearance
• Discussion Document
• Issue K2

• Competition Policy

• Commerce Act Pts 4/4A/5 Review

• Authorisation and Clearance

• Cabinet Paper
• RIS/BCCS
• Submissions
• Discussion Document
• Terms of Reference

Background

158. Section 62 outlines the following process for conferences in relation to restrictive trade practice authorisation applications:

1. The Commission prepares a draft determination and a summary of the reasons and sends them to the applicant and various third parties;
2. The recipients of the draft determination are required to notify the Commission within 10 working days of a date fixed by the Commission (not being a date earlier than the day on which the draft determination is sent) if they require a conference to be held. The Commission can also decide to hold a conference of its own motion; and
3. If a conference is to be held, the Commission must appoint a date for the conference and that date must be within 20 working days of the expiry of the 10 working day period referred to in (b).

The issue and option

159. The issue is whether the timeframes serve any purpose or are unduly rigid.

Analysis

Clear and consistent legislation

160. There are timing inconsistencies between the merger and restrictive trade practices authorisation processes:

• The merger process has an overall timeframe of 60 working days or such longer period agreed between the Commission and the applicant. There is no overall timeframe for restrictive trade practices. However, targets are included in the annual statement of intent between the Responsible Minister and the Commission. Those targets are the same for mergers and trade practices; and
• There are no time limits on any components of the merger process.

161. The lack of consistency on timeframe issues can be a problem where an application or two or more related applications have both Part 2 and 3 implications. The Commission has advised us that this was an issue in relation to the Air New Zealand/Qantas strategic alliance authorisation application. The differences made it difficult to operate the merger and restrictive trade practice procedures in parallel.

162. A final legal consistency issue is that there is a minimum of prescription of processes under Part 5. The time restrictions on two components of the trade practices authorisation process are inconsistent with that broader philosophy.

Timeliness

163. Having time limits on two parts of the process but not the process as a whole does not, in our view, contribute to timely decision making.

Conclusion

164. Our preliminary view is that the 10 and 20 working day requirements are arbitrary, unnecessary and, at times, impractical. It should be left to the Commission to decide on the timing of specific parts of the restrictive trade practice authorisation process as it sees fit. The same should apply if a trade practices clearance system were to be introduced.