Commission sets priorities

Press, 19 June 1986, Page 23

Commission sets priorities

PA Wellington The chairman of the Commerce Commission, Mr John Collinge, said the Commission had decided that trade practices which were illegal without proof of substantial lessening of competition, were intended to have priority under the Commerce Act, 1986. These were the so called classic cartels which restricted competition in prices between competitors, and were regarded by the Act as a fraud on the consumer and user. Examples of such practices were collective pricing agreements, collusive tendering, resale price maintenance, market sharing agreements,

collective boycotts and collective refusals to supply. Mr Collinge said the Commission would systematically look at practices of this kind, including those which had existed in the past, to see whether they were continuing. It was possible to obtain an authorisation for some of the foregoing practices on the grounds that the public benefit outweighed any lessening of competition. These authorisations had to be given in advance of the practice. Participants could not rely upon the making of an application for authorisatio as a defence to the laying of a complaint. No particular industry or

company would be singled out for any special treatment. Mr Collinge said that the Commission expected its activities to be complaint driven. There were also other practices which could be unlawful if they resulted in a substantial lessening of competition. Practices within this category which would have the early attention of the Commission were restrictions upon advertising, obsolescence agreements, “full line” forcing, “third line” forcing and production limitation agreements. As a third set of priorities, activities of businesses having a dominant position in any

particular market would be reviewed, and such activities which resulted in restricting entry into markets or preventing persons engaging in competitive conduct, would be examined. Finally, there were also a number of practices which were caught by the Act, but which required much fuller investigation before action was taken. These included price discrimination, exclusive dealing, franchise agreements, trade association ethics, “tied” finance arrangements,, directed insurance and recommended price lists.