Revised New Zealand Competition Law Regime to Undergo Overhaul
In a bid to modernise and strengthen New Zealand's economy-wide competition regime, the government has unveiled plans to amend the Commerce Act of 1986 by the end of 2025. The reforms, expected to be presented to the Parliamentary Assembly in 2025, aim to address complexity, costliness, and delays in the current regime, providing more certainty and reliability for businesses.
The new governance model will see a fresh governing board mostly comprising part-time members, with regulatory decisions delegated to committees or the chief executive and commission staff. A new objective test will be included in the revamped competition framework to clarify when below-cost pricing violates the Commerce Act.
The commission will be empowered to assess patterns of small acquisitions over a three-year period, addressing creeping acquisitions and predatory pricing. The new merger regime will align with Australian frameworks, introducing a new substantial lessening of competition (SLC) test. The SLC test will apply to conduct that creates, strengthens, or entrenches market power.
The Commerce Commission will also accept voluntary behavioural commitments for the resolution of competition concerns. Proof of recoupment will be scrapped under the new rules, streamlining the process. Regulatory decisions will be bound by a new statutory timeframe of 140-160 working days for complex merger cases, ensuring faster decisions.
To provide expertise and commercial experience, new committees comprising experts will be introduced. These experts will be picked from a new statutory commission panel. The commission will also be able to pause and assess risky mergers before their completion, providing stronger protections.
The amendments are expected to receive parliamentary approval by mid-2026. The refreshed competition regime in New Zealand follows recent action taken by its neighbour Australia to update its merger framework.
Under the new regime, promotions and one-off discounts will not be captured unless evidence of a broader pattern emerges. The watchdog will be required to submit a decision summary within one day and publish its full reasons within 20 working days, ensuring transparency and accountability.
The reforms are intended to boost competition, providing businesses with a more predictable and efficient regulatory environment. The government's aim is to refresh the merger regime for clearer rules, faster decisions, and stronger protections, fostering a more competitive and dynamic economy.
