Market studies

Access to the Commerce Amendment Act 2018 is available at www.legislation.govt.nzopen_in_new and the legislative history is available at www.parliament.nzopen_in_new.

What is a market study?

A market study is an in-depth and independent study into the factors affecting competition for particular goods or services, to find out how well competition is working and whether it could be improved. Unlike our competition enforcement and merger investigations, market studies look at the structure, conditions and performance of the market itself rather than whether there could be a breach of the laws that we enforce or whether a merger is likely to raise competition issues.

By gathering and analysing information on a market we can identify whether there are features preventing it from working well. We can then look at the effects of features identified and consider how they can best be addressed using proportionate means.

Outcomes of our work may range from a ‘clean bill of health’ for the sector to, where we consider it appropriate, recommendations for changes to enhance market performance. Although any recommendations we make are non-binding, the Government is required to respond to our final report findings and recommendations within a reasonable period.

We have published guidelines that describe our processes and approach to market studies, including how we deal with information.

Who decides what markets to examine?

Market studies can be initiated by the Minister of Commerce and Consumer Affairs or self-initiated by the Commission. In either case the initiator must be satisfied that it is in the public interest to do so. The Commission will assess the public interest by reference to the purpose of the Commerce Act, which is to promote competition in markets for the long-term benefit of consumers in New Zealand.

What is the process for a market study?

The initiator of the market study (the Minister or the Commission) will publish terms of reference setting out the scope of the study and timeframe for completion. The Commission is also likely to issue a call for information from interested parties.

Following initiation, the Commission will commence an information-gathering phase. We will publish our draft findings in a draft report and consult on it. Any recommendations in a final report will be non-binding on Government, but may include recommended measures to improve the performance of markets, such as changes to regulation, policy or the conduct of market participants.