Most Read Contributor in New Zealand, September 2016
The Commerce Commission is reviewing its M&A and
authorisations policies and has released
draft guidelines for consultation.
This is an important opportunity to give feedback on the
Commission's approach to competition law. There have been some
significant decisions since the Commission last reviewed its
processes, including The Warehouse case, Kotahi
decision and the Australian Metcash case, so interest in
the review should be high.
Submissions are due to the Commission by Tuesday 9 April.
How we can help
Chapman Tripp will be participating in this process by making a
written submission and following up by meeting with Commission
staff. If there are any views that you would like represented in
the context of our submission, please contact one of our
We will be discussing the guidelines with the Commission between
28 March and 9 April 2013, so would welcome any input before then.
Alternatively, if you wish to submit in your own right, we would be
happy to help you with your submissions.
This consultation is not a complete re-working of the
Commission's approach to merger regulation. Rather, the new
guidelines are for the most part a plain English re-write of
existing practice, updated to recognise recent decisions. Still,
this is a valuable opportunity to give the Commission practical
feedback on "user" experience with the Commission's
approval processes. Areas of interest include:
how probable a potential counterfactual scenario must be in
order for the Commission to consider it "likely" and as
such compare it to a "factual" (the state of affairs
after an agreement)
how firms might gain certainty where they seek authorisation
but the Commission cannot assess a public benefit due to the
factual not substantially lessening competition (currently these
are not authorised on the grounds of "no
whether there may be a formalised process of private discussion
with the Commission where parties can decide whether to make an
application without disclosing their actions to the market,
whether statements of unresolved issues during the clearance or
authorisation process could recognise issues that have been settled
by the Commission – for instance which market(s) are being
analysed, or which counterfactuals are relevant.
The draft guidelines
The draft guidelines reinforce the key elements of the
Commission's historical approach to competition assessment.
Those elements include the counterfactual test, the
"hypothetical monopolist" or "SSNIP" test; and
the "safe harbours", within which an acquisition will
probably not amount to any sort of anti-competitive merger.
The main areas for change come from the Commission's reading
of The Warehouse case1. The Commission has
emphasised that it may consider multiple potential
"counterfactuals" and that applicants will have their
clearances or authorisations declined unless the Commission is
convinced that there will be no anti-competitive effects when
measured against all potential counterfactuals.
1 The Commerce Commission v Woolworths Limited
 NZCA 276
The information in this article is for informative purposes
only and should not be relied on as legal advice. Please contact
Chapman Tripp for advice tailored to your situation.
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