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New Zealand Dental Association makes changes

New Zealand Dental Association makes changes as a result of Commerce Commission investigation

The New Zealand Dental Association will make a number of changes to how it conducts it annual national price survey in the future as a result of Commerce Commission enforcement action.

The NZDA has agreed several changes to its process, including making pricing information available to all members of the industry and to the public. In addition, any future surveys will include information which reminds recipients of the prohibition in the Commerce Act of the price fixing and other anti-competitive arrangements.

Commission Acting Chair Paula Rebstock said the Commission acknowledges the NZDA’s willingness to amend the survey in order to minimise the risk of anti-competitive arrangements or understandings being formed by the dentists.

She said the Commission had completed its investigation into the NZDA and found no apparent breach of the Act.

“While the survey provides an annual range of dentistry prices, there is no indication that the survey sets specific and exact pricing that members must adhere to,” said Ms Rebstock.

“The NZDA has advised the Commission that the investigation itself has significantly raised the awareness of the Commerce Act amongst dentists, and the Commission acknowledges the co-operation it has received from the NZDA.”

As part of its investigation, the Commission wrote to every member of the NZDA, and asked a number of questions concerning the survey. More than 650 dentists responded to the Commission’s questions – 38 percent of its membership.

The matter came to the Commission’s attention after it received information relating to concerns about a survey run by the Auckland Dental Association. Further investigation revealed that the NZDA had been running annual surveys, including surveys on pricing information from its members, for many years. The Commission’s investigation focused on the national association, although the changes to the survey process will also be made by the Auckland Dental Association.

Background Commerce Act Section 30 Section 30 deems that provisions of contracts, arrangements or understandings, will have the purpose, or effect or likely effect of substantially lessening competition for the purposes of section 27 of the Act, if those provisions have the purpose, or effect or likely effect of fixing, controlling or maintaining the price of goods and services (or any discount, allowance, rebate or credit) supplied or acquired by parties in competition.

There are two key elements that must be shown to establish a breach of section 27 via section 30: the provision must be part of a contract, arrangement or understanding between competitors (or persons who would be in competition but for the provision); and a provision of that contract, arrangement or understanding must have the purpose, or effect, or likely effect of fixing, controlling or maintaining prices (or provide for the fixing, controlling or maintaining of prices).

If these elements are shown in relation to a provision, then section 30 deems that provision to substantially lessen competition in breach of section 27 of the Act.

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