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The Commerce (Commerce Commission Reform) Amendment Bill, introduced in early March, is the Government’s response to the independent review of the Commission’s governance and effectiveness. But it contains some surprises.
The Bill is awaiting its first reading and will be exposed to the usual select committee submission process.
New Commission “functions"
The review recommended, and cabinet agreed, that the Commission’s functions should be spelt out. The review noted that ideally these functions would be comprehensive while also providing guardrails for the Commission’s use of its powers.
But, as well as listing the Commission’s existing statute-based functions, the Bill appears to provide for a wider set of tasks, including:
- issuing warnings, reports, guidelines, or otherwise commenting, on “any matter” relating to competition, whether in relation to individual entities or more generally.
The fundamental principle of the Commerce Act is that competition in free and open markets results in better outcomes for consumers. Only in rare cases, where competition is not possible, does the Commission directly intervene in markets, and then only subject to strict legislative guardrails.
The Bill appears to invite the Commission to directly intervene in markets and commercial conduct, not on the basis of lawfulness, but where the Commission considers it knows better. Intervention of that kind could make the Commission more like a player and less like a referee. Such a significant change to the Commission’s role requires a proper policy process and we don’t see evidence that has happened, and - keeping the operation of commerce legislation “under review”.
This function overlaps with the remit of the Ministry of Business, Innovation and Employment. The Commission ought to be consulted on changes to commerce legislation, as an expert and because it is ultimately tasked with giving effect to any changes. However, there is value in an enforcement agency not having an official role in changing the laws it enforces. Blurring the line between policy and enforcement could result in concerns that, where the Commission does not like an enforcement outcome it could respond by proposing a law change.
Separation of governance and decision-making takes effect from 2030
A key recommendation of the review, accepted by cabinet, was to separate the governance from the decision-making of the Commission.
Establishing a new Commission board, separate from Commissioners (decision-makers) was considered central to giving effect to this recommendation. The compromise was that up to two Commissioners could sit on the board, but neither would be the chair.
The Bill provides for this separation to occur in four years. In the meantime, the current Commission chair would both chair the board and remain Chief Commissioner for the remainder of his term (July 2030). The board would have a minimum of four members.
We support allowing all current Commissioners to retain their roles as far as possible within the new set-up. The focus of the review was structural, not the performance of any individuals, and we see no reason for Commissioners’ position to be disrupted. We are also comfortable with the reduction in overlap between governance and decision-making which the Bill provides for from July 2030.
What is less clear, and not anywhere explained, is why the Bill provides for an increased concentration of decision-making and governance (see further below), directly cutting across a central recommendation of the review, for an interim period until mid-2030.
New “regulatory committees” with external experts
Commission determinations are currently made by panels of at least three Commissioners, known as “divisions". The Bill would replace these with “regulatory committees” which would exercise the Commission’s statutory functions and make determinations.
Members of each regulatory committee would be appointed by the Commission board and could include non-Commissioners, such as external experts or Commission staff. It is possible a committee could have more than one non-Commissioner, but Commissioners will hold the majority of the voting rights.
The UK Department for Business and Trade put out a consultation paper in January that proposes abolishing the use by the Competition and Markets Authority (CMA) of an independent panel of decision-makers for merger and market investigations.1 The proposal aims to ensure senior leaders of the CMA make key decisions on the basis that they are accountable to Parliament (where independents are not).
It remains to be seen whether the Commissioner majority mechanism proposed in the Bill would effectively balance the accountability of Commission leaders and the desire for outside perspectives to form part of Commission decision-making.
Regardless, the identity of the external experts will be of real importance, and we have not yet seen how these appointments will occur.
Two-Commissioner regulatory committees to replace three-Commissioner divisions?
While the Bill requires that regulatory committees have at least two Commissioners as members, there is no minimum number of committee members (compared to the status quo of at least three Commissioner divisions). This could result in a more concentrated decision-making panel, compared to the status quo. It would also be at odds with the review proposal that each committee “consist of at least three Commission members and up to one other person in relation to any matter within the Committee’s mandate”.2
We assume this increased concentration is unintended and will be remedied as the Bill progresses through Parliament and Select Committee.
“Named” Commissioners replaced by “specialist” Commissioners?
Named Commissioners would be disestablished while allowing the existing Telecommunications and Grocery Commissioners to continue as specialist Commissioners for the remainder of their respective terms. We support the transitional period. We also support removing the role of named Commissioners for similar reasons to those given in the review.
The Bill provides that the Minister be able to appoint up to four “specialist” Commissioners, two more than the “named” Commissioners that exist under the current statutory framework. Further, in making an appointment the Minister would have to identify the Commissioner’s speciality. The Bill requires that specialist Commissioners be appointed to regulatory committees where the committee will consider matters within that specialist Commissioner’s speciality area.
The ability to appoint specialist Commissioners was not recommended in the review, and it seems to us they present similar risks to those identified in the review in relation to named Commissioners. That said, there is no minimum number of specialist Commissioners that must be appointed so there is potential for this mechanism not to be used once the current Grocery and Telecommunications Commissioners complete their current terms.
- UK Department for Business and Trade, Refining our Competition Regime: Driving growth and enhancing competition for businesses and consumers (20 January 2026)
https://assets.publishing.service.gov.uk/media/696e4aa4bbcea094189e23b7/refining-our-competition-regime.pdf - At page 50.
