The Auckland High Court today upheld the Commerce Commission's decision to authorise the New Zealand Rugby Football Union's (NZRFU) player transfer system.
Commission Chairman Dr Alan Bollard said that the NZRFU applied to the Commission for authorisation of the player transfer system, which was granted in December last year. The Rugby Union Players' Association (RUPA) appealed the Commission's decision to the High Court, and the Court has now dismissed the appeal.
Dr Bollard said it is important to note that the transfer system does not regulate players' salaries. This is determined by negotiations between the player and the union that wants him.
The system regulates the fees one union would pay to another for transferring a player, the number of players that can transfer during a season, and the dates between which players can transfer.
The judgement states about the Commission's decision: "The specialised expertise of the Commissioners themselves together with the research teams available, have resulted in a final determination occupying 99 pages and 419 paragraphs. Clearly it is the culmination of an examination in depth of the competition law aspects of the application which demonstrably could not be duplicated in a three day hearing before this Court."
The judgement states about RUPA's appeal: "As our discussion of the case in the preceding sections of the judgement shows, there can be only one answer. The appellant has failed in what it set out to do and by a wide margin."
"This judgement from the Court is another strongly positive judicial comment about the Commission's procedures for considering applications to it and making decisions on the applications," Dr Bollard said.
In recent years, all five appeals against Commission decisions have been rejected by the High Court and the Court of Appeal. These cases involved the electricity, fertiliser and telecommunications industries, and now rugby.
"The Commission has built up considerable knowledge of and expertise in competition law," Dr Bollard said, "and the Courts are acknowledging the accuracy of its work,"
Background
The Commerce Act prohibits business practices that substantially lessen competition. However, it also allows parties to the practices to apply to the Commission for authorisation of an otherwise prohibited business practice. The Commission will grant an authorisation if it is satisfied that public benefits from the proposal outweigh its detriments to competition.
The Act also prohibits business acquisitions that result in dominance being acquired or strengthened in any market. Parties can apply to the Commission for a clearance, which will be given if the Commission is satisfied that dominance is not acquired.
Parties can apply for authorisation of an otherwise prohibited acquisition. The Commission will grant an authorisation if it is satisfied that public benefits from the proposal outweigh its detriments to competition.
In the last two years the Commission has made more than 80 clearance and authorisation decisions. Five appeals were made against decisions; all were rejected by the Courts.
