OECD kpcdb

1. Scope

 

Under Section 36 of the Act a business will breach the Commerce Act if it: (i) has a substantial degree of market power, (ii) takes advantage of that power, and (iii) has an anti-competitive purpose. Section 36A extends the scope of these provisions to conduct in Trans-Tasman markets .

 

Anti-competitive purposes are one of:

 

a)  restricting the entry of a person into that or any other market; or

b)  preventing or deterring a person from engaging in competitive conduct in that or any other market; or

c)  eliminating a person from that or any other market.

 

2. Assessment

 

The Commission has issued a Factsheet in 2012 on Taking Advantage of Market Power that sets out how the Commission undertakes its analysis in abuse of dominance cases.

 

A business is considered to have substantial market power where it can profitably hold prices above competitive level for a period of time. Factors considered in assessing whether a business has substantial market power include market share, existing competition, potential competition and countervailing buyer power. 

 

To determine whether a business has taken advantage of the market, the Commission uses a test adopted by the courts, which asks whether the business would have behaved in the same way if it did not have substantial market power.

 

3. Remedies and sanctions

 

See Section I. 4 above. 

 

From 1986 to 2015, there were 3 decisions made by the Courts of New Zealand sanctioning conducts in contravention of Section 36.