Commission wants acquisition advice

The government plans to amend the Commerce Act to prohibit business acquisitions that "substantially lessen competition". Currently the act prohibits business acquisitions that "result in dominance being acquired or strengthened in any market".

Chairman, John Belgrave, says the Commission's discussion document seeks comment on how the Commission should change its approach to considering the impact of mergers. It is not seeking comment on what amendments the government should make.

"We are distributing copies of our discussion document to business people, lawyers, economists, business advisors, academics and government organisations. We want their feedback by December 1 as we understand the Commerce Select Committee is scheduled to report back to Parliament by then."

Meanwhile the Commerce Commission has tabled its annual report in parliament showing that it was successful in all 23 court actions decided in the last financial year.

John Belgrave says the result is an excellent one, and historically the Commission has been successful in about 95% of its court actions.

"However, while court action is usually our most visible work, it is the tip of the iceberg when compared to all the work we do. During the year we carried out 800 investigations, with a significant number ending in either enforcement action or adjudication decisions."

"Looking ahead, the 2000-2001 financial year is likely to see the biggest changes in the Commission's responsibilities since its inception as a stand-alone agency in 1986. These changes include amendments to the existing law and new regulatory functions in electricity."

The Commission says major cases during the 1999-2000 financial year included a decision ordering Caltex, Mobil and Shell to pay penalties totalling $1.175 million and costs of $157,500 for price fixing by jointly removing the free car wash discount from the price of petrol in Auckland.

Another decision ordered Carter Holt Harvey to pay a penalty of $525,000 for using its dominant position to prevent or deter New Wool Products Limited from competing in the South Island insulation market. Carter Holt has appealed the decision.

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