Background
9. The Commerce Act 1986 ("the Act") empowers the Commission to grant clearance and authorisation for transactions following receipt of an application. A ‘clearance' may be granted for merger proposals if the Commission is satisfied that the merger is unlikely to substantially lessen competition. An ‘authorisation' may be granted for merger proposals and restrictive trade practice arrangements if the Commission is satisfied that the public benefits of the arrangement outweigh the competition detriments. Both a clearance and authorisation confer immunity for the transaction or conduct from the prohibitions under the Act.
10. In September 2006, Cabinet considered the terms of reference for the review of the clearance and authorisation provisions within the Act [EDC (06) 105 refers]. The terms of reference acknowledged that it is generally accepted that the provisions are of a high standard. Thus the intention of the review was to draw on experience to test whether changes to the provisions would improve the effectiveness and efficiency of the overall regime.
11. In May 2007, Cabinet approved the release of a discussion document, Review of the Clearance and Authorisation Provisions under the Commerce Act 1986 for public consultation [EDC Min (07) 10/5 refers]. Thirty three submissions were received.
12. In November 2007 Cabinet agreed to split the review into two tranches and extended the deadline for report back on the second tranche. [EDC Min (07) 25/6 refers]. As part of the first tranche, Cabinet agreed to amend the Act to provide for varying and enforcing undertakings and to simplify conference procedures for trade practice authorisations. These amendments were included in the Commerce Amendment Bill, which was enacted in the first week of September 2008. In addition, it agreed that no change was required to widen the use of lay members to sit as part of the High Court to consider appeals.
13. The issue of establishing a specialist tribunal to determine appeals against Commission decisions was considered separately as part of the Parts 4 and 4A review provisions. Cabinet determined that appeals should continue to be heard by the High Court, sitting with lay members. [POL Min (07) 26/7 refers].
14. This paper reports back on the second tranche of issues.
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