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Contents
The Commerce (Promoting Competition and Other Matters) Amendment Bill (Bill) proposes a series of amendments aiming to make beneficial collaboration easier. We run through the changes and identify a missed opportunity.
This is the third commentary in our series on the Bill. Earlier commentaries covered the provisions in the Bill relating to merger control and conduct.
Submissions close on the Wednesday, 4 February 2026.
The Bill introduces a statutory notification regime that would allow firms to notify proposed collaborative conduct and proceed unless the Commerce Commission (the Commission) objects. It would replace the current reliance on “please explain” correspondence and enforcement action, or an authorisation process.
While much will depend on practice, we see the potential for certainty and efficiency to flow from statutory notification arrangements. They provide an opportunity to engage with the Commission in a constructive rather than enforcement-led manner, and to obtain comfort as to how arrangements will be treated.
Initially, the conduct that will be subject to notification will be collective bargaining (with a low value threshold of less than $3m over 12 months) and resale price maintenance (which we agree it is appropriate to be more flexible about). But types of conduct can be added and removed over time.
The Commission will have class exemption powers to exempt categories of conduct that are low-risk or clearly beneficial. As explained below, we think this attacks the problem from the wrong end and that the more elegant starting point would be to narrow the scope of the cartel prohibition so that parties could engage in at least some of the sorts of arrangements the exemption power seeks to allow without having to assess whether they would fall within an exemption.
This proposal also inappropriately casts the Commission, an enforcement body, into a rule-making role.
The Commission will have discretion to waive or reduce application fees. We support this exception if evidence suggests the fee operates as a deterrent.
The Bill provides a new process for applicants to request assessment of a cartel provision without a full competition impact assessment. The Commission need only assess the conduct’s purpose and whether cartel provisions are reasonably necessary. The intention is to make it easier and faster to obtain approval.
We broadly support the direction of travel in this change but offer three observations for consideration.
- Our experience is that assessing whether provisions are “reasonably necessary” can be as difficult as conducting the competition impact assessment, so it is uncertain whether the proposal will materially streamline beneficial collaborations. This complexity highlights the importance of the Commission publishing practical and informative guidance (as set out further below).
- Although the Commission will not conduct a full competition impact assessment, the parties will still need to do so, or seek additional clearance or authorisation, in order to be confident to proceed as the “substantial lessening of competition” test will still apply.
- The Bill would allow the Commission a power to impose conditions on collaboration clearances. We have some hesitation about the scope this would give the Commission to influence how commercial parties’ legitimate collaborations operate. That said, it could be positive if it allows conduct to occur that is beneficial and would otherwise be prevented.
Clearance and authorisation will be available for collaborative arrangements with changing participants over time. This is a useful clarification.
Chapman Tripp comments
The existing collaborative activity exception already provides flexibility and is capable of allowing genuinely beneficial collaborations that do not substantially lessen competition. The Commission has also been willing to engage constructively on the application of the exception, which is an opportunity to test and gain comfort regarding the collaboration.
A key challenge is for parties to confront the idea that, by collaborating, they might trigger the prohibition on cartel provisions (even if, ultimately, there is good reason to think their conduct is lawful because of the exception). This is particularly the case given the seriousness of the breach of the prohibition (in particular, that it attracts criminal sanction). The effect of these realities can be to deter parties from exploring a collaboration at all.
Two improvements that are not provided for in the Bill would, in our view, assist to overcome this challenge.
1) As noted above, the scope of the prohibition on cartel provisions could be narrowed. As currently framed, it is very broad and capturing collaborations where there is no good reason to suspect anti-competitive collusion.
We have observed this scenario most clearly in relation to “restricting output”, where the prohibition can be triggered by conduct that isn’t capable of placing upward pressure on price or causing economic harm. Many environmental initiatives fall into this category. The need for the would-be collaborators to go through the cost and effort of a detailed risk assessment, and/or applying for a collaborative activity exception in circumstances where it is palpably irrelevant can deter activities that are inherently benign and may be beneficial.
2) We support the continued evolution of guidance, education and case law to improve our collective understanding of the collaborative activity exception and its ambit. Embedding good law through these mechanisms will allow parties to be more confident about pursuing beneficial collaborations. Our publication on the Commission’s Collaboration and Sustainability Guidelines is here.
