The perception in the business community that the Commerce Commission is taking a harder line in enforcing the Commerce Act is correct Commission Chairman, Dr Alan Bollard, said today.

Dr Bollard was speaking in Wellington at a conference on trends and future directions in competition law.

He said the Commission's more vigorous approach to enforcement arises from a deliberate policy.

The economy has gone through major changes in recent years. As sectors were deregulated the Commission had taken a more educative role and made considerable effort to contact firms in those sectors informing them of their obligations under the Act and advising them when they were in danger of breaking the law.

In hindsight, this worked reasonably well and many problems have been resolved without enforcement action by the Commission. The last sectors to be deregulated, electricity, gas and health, have now had sufficient time to become fully aware of their obligations and the Commission sees the transition period as over.

In these and other industries investigations are now clearly focused, with the emphasis no longer on obtaining information but on gathering evidence, which, if need be, could be used in court. The Commission can issue warnings, negotiate settlements and take court action after an investigation.

A greater range of skills are now available to the Commission, including professional investigative skills and experience. Specific teams are formed to conduct major investigations, and experienced team leaders are responsible for these teams.

Investigation methods have changed. In several recent cases phone records were used successfully to show communication between key people had occurred, which when matched with other evidence, established collusion between competitors.

In another recent case information was carefully collected over a long period from many people, all of whom wished to remain anonymous. After analysis, that information enabled search warrants to be executed and crucial evidence to be obtained. Without the initial information and the thorough analysis of it, investigators would have had to make a more general search and some or all of the evidence would have been lost.

Also, computers are now an integral part of investigations, particularly where large numbers of documents have to be analysed. They have made analysis quicker and more accurate.

"In a light-handed regulatory regime, it is important that the lines of acceptable behaviour are drawn as clearly as possible . It is only fair to consumers and other businesses that any contraventions be stopped," Dr Bollard said.

"Those within the Commission, and some outside, have noticed the increasing investigative focus of the Commission. This will become increasingly noticeable when some major cases now on hand are progressed a little further. I am unable to talk about any specific investigations, because many are still either being investigated or are being brought before the courts, but they will clarify acceptable types of corporate conduct.

"However, it is important to keep in mind that our aim is compliance. When necessary we will prosecute organisations and individuals but voluntary compliance is a far better option for everyone."

Media contact:Communications Officer, Vincent Cholewa

Phone work (04) 498 0920, home (04) 479 1432