As part of its focus on the health sector, the Commerce Commission has distributed guidelines to all major health organisations to help them comply with the Commerce Act.

The Commission's Commerce Act Manager, Jo Bransgrove, said the guidelines were published because the Commission is concerned about the poor understanding of the Act in such a significant sector of the economy.

"Health is huge part of the economy," Ms Bransgrove said. "It is a $6 billion a year business, and it is a major concern that understanding of the Act in this sector is poor.

"The aim of the Act is to prevent anti-competitive behaviour so that customers - and in this case that is all New Zealanders - get better services."

An example of the problems the Commission has encountered has resulted in court action against the Ophthalmological Society and five individual ophthalmologists. The Commission is alleging that anti-competitive collusion by the Society and the five ophthalmologists led to the cancellation of 225 cataract operations to be performed in Invercargill by Australian ophthalmologists.

Ms Bransgrove said that the Commission's objective is compliance with the Act, and it will use a mix of education and enforcement to achieve this.

It will be meeting with organisations in the public and private health systems representing funding agencies, health professionals, hospitals, insurance companies and pharmaceutical companies to explain the Act to them.

At the same time, investigations into possible breaches of the Act will continue and enforcement action will be taken if necessary. This would involve issuing warnings that behaviour risked breaching the Act, entering into settlements in which the organisations investigated give signed undertakings stating how they will change their behaviour, and taking court action.

Courts can impose penalties of up to $5 million on an organisation and up to $500,000 on an individual. They can also impose a wide range of orders and injunctions.

The guidelines

The just published guidelines relate the Act specifically to the health sector and use examples from the sector.

They give a general overview of the Act and the Commission's role, and look in more detail at collusive behaviour, price fixing, market dominance, resale price maintenance, trade associations, authorisations and clearances.

Copies are available free of charge from Commission offices.

Media contact: Commerce Act Manager Jo Bransgrove

Phone work (04) 498 0958

Communications Officer Vincent Cholewa

Phone work (04) 498 0920

Commission media releases can be viewed on its web site www.comcom.govt.nz