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Commerce & Consumer Affairs Minister tells Commerce Commission to take more aggressive legal action against suspected anti-competitive behavior, even if it ends up losing some court cases

Public Policy / news
Commerce & Consumer Affairs Minister tells Commerce Commission to take more aggressive legal action against suspected anti-competitive behavior, even if it ends up losing some court cases
Andrew Bayly appears at a select committee meeting during 'scrutiny week' in June 2024
Andrew Bayly appears at a select committee meeting during 'scrutiny week' in June 2024

Commerce and Consumer Affairs Minister Andrew Bayly has instructed the Commerce Commission to take more legal action against possible anti-competitive behavior, even if it means losing in court. 

Speaking to lawmakers at Parliament, he said he had asked the competition watchdog to be a “courageous litigator” and spend its entire $12.6 million litigation budget.

Bayly said the Commission had historically underspent on litigation and that it should be taking more difficult cases to discourage anti-competitive behavior.

“I want it to be challenging and I want it to pursue those cases, even if it does not win … if they want to test something, and may lose the case, that does not worry me,” he said. 

“I want them to spend all of the money and be courageous about doing it”. 

Earlier in the week, the Commerce Commission filed proceedings in the Wellington High Court against Foodstuffs North Island. The lawsuit alleges the supermarket operator blocked competitors from opening rival stores in particular areas. Foodstuffs settled the case immediately and the High Court will determine if any specific orders will be made. The allegations were historical and the barriers were removed in 2021. 

Commission chairman John Small said filing the lawsuit was important because it demonstrated the watchdog would go after any business using land covenants to block competitors.

Bayly wants to see more of this type of legal action to ensure anti-competitive behavior doesn’t go unchallenged and the findings of market studies are properly enforced.

Bang for bucks   

Budget 2024 cut the market study budget from $3.5 million to $2.6 million due to uncertainty around when the next probe would happen and what it would investigate.

Bayly told the Parliament committee he was open to new market studies but he wanted the Commerce Commission to first focus on getting results from the past four studies. 

Studies have been conducted into retail fuel, the grocery sector, residential building supplies and one into personal banking services is underway. However, they haven’t yet led to radical transformation. 

The “jury was still out” on whether consumers are better off after these investigations, Bayly said, as there hadn’t been “demonstrable changes” in petrol or grocery prices. 

It was even harder to assess whether policy changes had created a business environment that would foster further competition over time. 

Bayly said he wanted to get more value out of the $40 million to $50 million spent on the existing market studies before doing any new ones.

“Why don't we focus our efforts on those four studies in the meantime, and see if we can get a better bang out of it. And if I need to go through my Cabinet colleagues to execute, I’ll push that through”. 

KiwiSaver & the NZX

Bayly also discussed challenges in New Zealand’s capital markets, which have often been blamed for poor productivity growth and underwhelming innovation. 

Some listing rules on the local stock exchange were holding businesses back from accessing equity funding, he said. Climate reporting obligations, for example, were having an impact. 

Bayly said he was working with NZX Limited, which operates the exchange, to make changes to the legislative framework to make sure listing was “as attractive as possible”. 

But the “big thing” he was doing was asking KiwiSaver fund managers what needed to be done to get them to invest more in local, unlisted businesses. 

There was roughly $200 billion of capital available for investment in New Zealand, more than half of which was sitting in these retirement funds and was mostly invested offshore. 

Bayly said fund managers ought to be allocating more money into local private equity investments, or in his words: “great New Zealand businesses”.

“And so, what I've been saying to them is: what's stopping you? Because you are terribly underweight,” he said. 

KiwiSaver managers had identified three barriers and he was helping them work through those, even though he doesn’t agree they are real problems. 

“I want to make sure there's no perceived or actual barriers to them investing in great New Zealand businesses rather than being flogged off overseas”.

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5 Comments

On behalf of all New Zealanders, give the ComCom some teeth ! 

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7

ABSURD.  The Minister should be sacked.

The government should be setting legislation and regulation to ensure competition in the first place.

Why make ComCom do something unproductive and take excessive court cases.  The ultimate oxymoron.

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5

Golly! 

Andrew Bayly is good. 

More of this, please.

Why? Because winning or losing court cases isn't the measure of success. Bringing them to Court is! 

In the US, and Europe, companies are terrified of incurring the attention (wrath?) of their watchdogs. As a result, all players in a sector are far more respectful of their customers. When the watchdogs let their guard down? ... Well, lets talk about the GFC ...

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2
  • Supermarkets and how they bully suppliers and exclude new entrants
  • Fuel prices
  • Power prices, and is the transfer pricing mechanism fit for purpose with renewable generation
  • Banks and....    pricing
  • Building Materials

In a cost of living crisis taking a look at the typical family costs should be a priority

 

 

 

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5

The primary responsability for designing the appropiate economic regulations lies with the lawmakers and not with the watchdog they have installed. Check if the likes of Austria, Switzerland, Netherlands, Denmark, all those sophisticated EU countries have installed consumer watchdogs by law? I don't believe their is any.

'Failure' of certain laws is the sole accountability of the law makers in The Beehive at both sides of the aisle!

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3