Executive Summary
3. The review considered whether there were ways to improve the effectiveness and efficiency of the clearance and authorisation regime under the Act. Overall, it concludes that the provisions are of a high standard and work well for our small economy and given resource constraints on the Commerce Commission ("the Commission"). In particular, the Commission's analytical framework for assessing public benefits and detriments is widely regarded as best practice.
4. A discussion document outlined issues for consideration across four general themes: merger processes, trade practices, legal process and the framework for assessing costs and benefits.
5. Four legislative changes are recommended relating to the Commission's processes and third party appeal rights against Commission determinations:
- The statutory time frame for the Commission to make merger clearance determinations should be increased from 10 to 40 working days, broadly reflecting current practice.
- The requirement that parties halt conduct while the Commission is considering an application for authorisation of that conduct should be repealed, thus requiring the Commission to seek court orders if it considers the conduct is harmful to competition. This provision may remove a barrier to parties applying for authorisation.
- Subject to (d) below, the right of an applicant and third parties1 to call a Commission conference in the course of considering an application should be repealed (conferences will be called at the initiative of the Commission only). In addition, the Commission should be able to call a conference at any time during its proceedings and not just after the release of a draft determination.
- Standing of third parties to appeal against Commission determinations (currently linked to participation at a conference) should be amended as follows:
- for authorisation determinations, third parties will have standing if they can satisfy the court that they have a significant interest, for example, in the determination and they participated in the Commission's proceedings on that determination; and
- for clearance determinations, third parties should not have standing to appeal. These parties must instead rely upon judicial review.
6. Some of the concerns raised by submitters with the Commission's merger process can be better addressed through non-legislative means. The outcomes of the Commission's recent best practice review of its merger clearance process should enhance the transparency and timeliness of the Commission's process within the existing statutory framework. Key features include a new pre-notification discussion option for merger parties, and the codification of the intention to release a "letter of issues" and a "letter of concern" at pre-specified, timely points in the clearance process.
7. Concerns with regards to the perceived uncertainty around trade practices can also primarily be addressed through a number of non-legislative means, such as improving existing processes, rather than investing resources into developing new processes, such as a clearance regime for trade practices. The Commission has instigated a review to consider the merits of developing a "streamlined authorisation" regime. If adopted such a process may address business requests for a more cost effective means of authorising arrangements that lessen competition but are otherwise in the public interest. Applications for collective bargaining arrangements could also be considered under this streamlined regime.
8. Finally, given that there are only four legislative changes recommended, none of which are urgent, officials recommend that these changes be included in the next suitable legislative vehicle rather than developing a specific bill.
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