Commerce Commission – compliance through enforcement, surveillance, education
Published28 Jul 1997
The Commerce Commission intends to further increase compliance with the Commerce and Fair Trading Acts through a mix of enforcement action, surveillance and education in the 1997-1998 financial year (1 July 1997 to 30 June 1998).
Commission Chairman Dr Alan Bollard said that the Commission has just published its Annual Plan setting out how it will use the funding allocated to it to best achieve compliance with the two Acts it is responsible for.
"Our objective of achieving compliance is much wider, and has much more impact on promoting healthy competition, than simply processing complaints and prosecuting people," Dr Bollard said.
"To be effective, the Commission must obviously take appropriate enforcement action, but it must also gather the information it needs so that it can focus clearly on key issues. In addition, achieving compliance by preventing breaches is better for businesses and customers, than enforcement action after the law is broken."
Specifically, the Commission anticipates taking enforcement action about 460 times in the financial year. This will include issuing 350 warnings to businesses whose behaviour is at risk of breaching either Act, entering into 78 settlements signed by the subjects of investigations and giving undertakings describing how they will change their behaviour, and starting 34 court actions.
The Commission will continue active surveillance of business acquisitions, business practices and advertising; liaison with industry and government organisations; and analyses of complaints and other information it receives to help it decide on what areas it should focus.
The Plan lists the areas on which the Commission is putting special focus this year. Under the Commerce Act these are health, wholesale gas contracts and emerging communications technologies.
Under the Fair Trading Act these are bait advertising, small print, "normal" selling price claims, claims about rights to guarantees and remedies, food and diet claims, cross border issues, the toy safety standard, statutory defences, court orders and claims concerning the need for any goods or services.
To help educate business people about the Commerce and Fair Trading Acts, the Commission is planning to organise 11 seminars, give 55 speeches, and have staff make extended visits to five towns where it does not have offices (Invercargill, Palmerston North, Tauranga, Nelson and Blenheim).
It will continue with its highly successful practice of encouraging businesses considering making applications for clearance or authorisation under the Commerce Act to seek guidance before making their application.
"The aim is to have business people better understand how their applications will be investigated and what information we need," Dr Bollard said. "The result is faster and better decision making. We may, of course, decline the application, but having even that decision is often better for a business than extended uncertainty."
The Commission will also continue to update and add to its range of books, guidelines, newsletters, and pamphlets to expand the range of information available to business people and their advisors. To increase access to information, it will soon promote public access to the web site it is currently building.
Copies of the Annual Plan are available from Commission offices.
