Commission may develop new business acquisitions processes: could work closely with business to do so
Published10 Apr 2000
The Commerce Commission will work closely with business groups if, as it appears likely, it develops new processes for handling business acquisitions.
Commission Chair John Belgrave said that the changes would depend on how the details of the Government's recently proposed changes to the Commerce Act take shape. He was speaking at the Institute of Directors' company chairmen's workshop yesterday.
"We would want to make the transition to the new regime as smooth as possible to keep compliance costs down for businesses and their customers and to minimise uncertainty," Mr Belgrave said.
As a first step the Commission would revise its investigation and decision making processes to ensure that they were in line with the amendments to the Act. It would also need to modify its application forms to reflect the new information needed and how it will be assessed.
The Commission would also meet with interested parties to get their input. It would publicise the outcomes of this analysis and debate and give guidance on how it would intend to apply the new acquisitions test.
The Commission expects that there will be an initial increase in the number of applications made to it under the new regime. However, it also expects that number to decrease, as the business community becomes more familiar with the Commission's, and possibly the courts', interpretation.
Background
On Wednesday April 5, the Acting Minister of Commerce, Trevor Mallard, outlined the Government's proposed changes to the Act. These included a recommendation to lower the threshold for business acquisitions prohibited by the Act. Currently, acquisitions that result in dominance in a market are prohibited. The proposal is to prohibit acquisitions that substantially lessen competition.
Mr Mallard also said that details of the proposed amendments will be referred to Parliament's Commerce Select Committee by the middle of the year and the public will be able to make submissions to the Committee.
