10 years of Commerce Act – two issues still unresolved
Published22 May 1996
EMBARGOED until 7.30pm May 22
As the Commerce Commission marks its twentieth anniversary and the tenth anniversary of the Commerce Act 1986, Commission Chairman Dr Alan Bollard has said that for the future, there are still two unresolved issues.
These are the high cost and delays of court action, and whether the Act effectively prevents the owners of natural monopolies from abusing their position. Natural monopolies are facilities that cannot economically be duplicated. Examples include ports, gas pipelines, and electricity and telecommunications lines.
Dr Bollard made his comments in a book, Commerce Commission 1975-1996 - The Coming of Age of Competition Law in New Zealand, launched today.
The Act gives people and companies the right to take their own private action and to appeal court judgments.
"The reality is that a major Commerce Act case can take several years to run in the High Court, at the cost of several million dollars, let alone pursuing the rights of appeal," Dr Bollard said.
"To some extent this is due to the complexity of the issues at stake and the design of the Act, which focuses on behaviour rather than structure. It is also, however, due to delays in getting court time, judgments and penalty decisions, due to the increasingly litigious nature of the business sector, and due to the ability that counsel have to use the court procedure for delay and obfuscation.
"In addition, New Zealand Courts have been reticent to date in awarding penalties anywhere near the maximum specified in the Act, in growing contrast to Australian Courts."
The second issue is whether the Act, the Commission and the Courts can deal effectively with situations when, to be competitive, a company must gain access to a natural monopoly controlled by a rival.
"The achievements within the telecommunications and other industries to date should not be underestimated here, but it is probably also fair to say that this issue has become more complex than the original competition policy designers had envisaged," Dr Bollard said.
"This is important because the issue is at the heart of New Zealand's light-handed regulatory environment."
The book includes a chapter by each Chairman of the Commission, except Kevin O'Brien, who is deceased. The authors are Bruce Bornholdt, John Collinge, Dr Susan Lojkine, Dr Bollard and former Examiner of Commercial Practices Peter Donovan whose chapter covers Mr O'Brien's term as Chairman. The editor, Commission Investigator Kathy James, also wrote the first chapter, a background to competition law in New Zealand before 1975.
For copies of the Coming of Age of Competition Law In New Zealand please contact: Communications Officer Vincent Cholewa