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The proposed conduct amendments to the Commerce Act discussed in this note should be reconsidered.
Several of the proposals in the Bill contribute to a trend, which we have also observed more broadly and for some while now, of increasing the discretion available to the Commerce Commission (Commission) while decreasing the scrutiny and accountability the Commission faces. The Commission is in general an effective regulator, but this trend is becoming a growing source of concern.
This is the second commentary in our series on the Bill and follows our publication before Christmas on the Bill’s provisions relating to merger control.
Submissions close on Wednesday, 4 February 2026.
Performance injunctions
The “performance injunction” provided for in the Bill is a new civil remedy for breaches of Part 2 of the Act (restrictive trade practices). It would enable the Commission to apply to the High Court to require market participants to take corrective action to remedy contraventions of the Act, aimed at restoring competition in a market.
We do not believe there needs to be any adjustment to what the Commerce Act says about injunctions. We are concerned that the mandatory injunctions provided for in the Bill may inappropriately cast the Court in a supervisory role.
We think it best that the Commission rely on the Court’s flexible inherent jurisdiction to meet the interests of justice in any given case.
A new type of market study
The Bill provides new powers for the Commission to carry out a study (effectively, a “market study”) in order to recommend new pro-competitive regulation (such as regulations to break down barriers to entry to, and expansion in, a market).
The Commission may already recommend industry-specific regulation following a market study (and did so in both the fuel and grocery market studies). This proposal would effectively strengthen the Commission’s market study powers and avoid some of a market study’s usual process protections.
We are concerned about the continuing drift towards detailed regulatory intervention in a widening range of markets – to which this proposal would contribute. In general, competition is more effective at driving efficiencies and positive consumer outcomes than regulatory intervention. In markets that are workably competitive, therefore, we think the Government should be reluctant to intervene in the competitive process.
Regulatory intervention is warranted in certain cases – e.g., where markets cannot function effectively without a rule-making function (for example, financial markets), or where there is a lack of competition and no prospect of competition in future.
But it is important when designing regulatory interventions to be clear about their costs, benefits and trade-offs, as well as the information asymmetry that regulators and policy-makers will inevitably face.
Furthermore, while the Commission is in general an effective, highly skilled and expert regulator, it is not a policy agency and, institutionally, faces little scrutiny and accountability in relation to its work.
This proposal risks drawing the Commission even further from its status as an independent statutory enforcement agency and into the realm of policy and politics. In our view market study powers have already contributed to such a shift, and consequent threat to the independence and integrity of the Commission, and this latest proposal only exacerbates that threat.
Repeal of section 46
Section 46 of the Act provides comfort for merging parties, by providing that Part 2 of the Act (prohibiting restrictive trade practices, including cartel provisions) does not apply to mergers and acquisitions. Mergers can be cleared or authorised, allowing the Commission to scrutinise them and, if clearance is given, parties to proceed with certainty that their transaction is lawful.
The Bill proposes to repeal section 46 on the basis that it is redundant as section 83(6) already prevents a person from being liable under the penalty provisions for Part 2 and Part 3 for the same conduct.
In our view, this section is very much not redundant. It is an important safeguard for merging parties.
Most significantly, it means that merger clearance allows parties to proceed with confidence that their transaction will not face challenge. Without section 46, even if parties successfully secure clearance for their transaction, provisions in their transaction documents could remain vulnerable to challenge, e.g., under the cartel prohibition. Section 83(6) does not prevent this and there is no other way to achieve comfort (except, theoretically, by filing a separate authorisation alongside a merger process, which would be impractical).
Our thanks to Hugo Lethbridge for his assistance preparing this update.
