More court action, settlements and higher penalties as Commission criteria take effect: Annual Report

The Commerce Commission's Annual Report shows that the Commission took more court action, achieved more settlements and won higher penalties in court than previously.

Commission Chairman Peter Allport said that this was the effect of the investigation and enforcement criteria that the Commission uses to ensure it focuses on key issues.

"This is a pleasing result," Mr Allport said. "The Report shows that the Commission is focusing its resources well on the issues where it can have the biggest impact on promoting competition by acting against breaches of the Commerce and Fair Trading Acts."

Under the Commission's adjudication role, the number of applications for clearance or authorisation reduced but the complexity of those received increased.

Mr Allport said that this was due to better education of the business community. The Commission published its Business Acquisitions Guidelines, and also has an "open-door policy" of welcoming informal discussion of proposals before they proceed.

The Guidelines and open-door policy help people understand the law, the relevant economic issues and the Commission's functions, and to structure acquisitions and trade practices so that they are unlikely to cause competition problems.

The Commission also received additional responsibilities. It now also enforces the Electricity Industry Reform Act and has been requested to carry out an enquiry into prices for airfield activities at Auckland, Wellington and Christchurch airports.

Statistical summary

Fair Trading Act: Highest fine at start of financial year, total of $63,000 against Bond & Bond. Increased to total of $67,500 on Colrayne Holdings Limited and Spencer York Publishing Limited; and then more than doubled to a total of $130,000 on Ashley Guy Rhodes and his four companies, Zennith Publishing Limited, Debson Holdings Limited, Summit Publications Limited and Pana Publications Limited (this decision has been appealed).

Commerce Act litigation completed: Southpower Limited agreed to no longer defend the Commission's allegations that Southpower had breached the Act, to restructure its businesses and to pay $450,000 costs to the Commission; Toyota New Zealand Limited $250,000 penalty; DB Breweries Limited $115,000 penalty and costs; Roadmarkers (Waikato) Limited $20,000 penalty and costs.

Commerce Act litigation before the courts at end of financial year: Carter Holt Harvey Limited; North Island meat companies; Caltex New Zealand Limited, Mobil Oil New Zealand Limited and Shell New Zealand Limited; Giltrap City Limited; Fletcher Challenge Energy Limited and ECNZ; Ophthalmological Society of New Zealand and five ophthalmologists; Christchurch Transport Limited and its chief executive; and Eli Lilly & Company (NZ) Limited, Chemstock Animal Health Limited and three of the companies' executives.

 

 

Media contact: Chairman Peter Allport

Phone work (04) 498 0962

General Manager John Feil

Phone work (04) 498 0963

Communications Officer Vincent Cholewa

Phone work (04) 498 0920

 

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