The New Zealand Rugby Football Union (NZRFU) has applied to the Commerce Commission for legal protection of its player transfer arrangements.
As a professional sports organisation, the NZRFU is covered by the same laws as other New Zealand businesses, including the Commerce Act.
Section 27 of the Act prohibits contracts and arrangements that substantially lessen competition. Regulating professional rugby players ability to transfer between provincial unions comes under this section of the Act.
If a union, a player or anyone else thought the NZRFU's player transfer arrangements breached the Act, they could take court action against it.
However, the Act does allow otherwise prohibited business practices to be authorised. An authorisation protects the practice against court action under the Commerce Act.
To give an authorisation, the Commission must be satisfied that public benefits from the practice outweigh its detriments to competition.
Commission Chairman Dr Alan Bollard said the NZRFU application will be treated in the same way as other applications made to the Commission.
The application will be investigated and a draft determination giving the Commission's preliminary view will be released by 25 October 1996.
Interested parties will have until 12 November 1996 to make submissions on the draft determination.
The Commission expects to release its final decision by early to mid December 1996, depending on the submissions received on the application.
