New Zealand's Commerce Act is being strengthened to give the Commerce Commission more teeth and to bring New Zealand in line with its key trading partner Australia.

Acting Commerce Minister Trevor Mallard says offending body corporates will face higher penalties as a result.

"To bring us into line with Australia we will amend Section 36 of the Act which deals with anti-competitive behaviour by dominant firms in a market," he said.

"We are replacing the phrase “dominance” with the lower threshold of “a substantial degree of power in a market”; and replacing “use” with “take advantage of”.

"This means the section will apply to a greater number of firms and markets.

"We're also wanting to hear what the public has to say about how best to deal with the difficult task of proving that a firm acted with an anti-competitive purpose". There are two proposals on this which will be referred to the Commerce Select Committee for comment. These are:
 reversing the burden of proof on establishing “purpose” when the Commerce Commission is the applicant; or
 providing that purpose may be inferred from relevant conduct and circumstances.
"The merger and acquisition restriction in section 47 is to be refocussed to align with Australia.

"That will restrict mergers that have the effect of substantially lessening competition and will allow the High Court and Commerce Commission to take into account the full range of anti-competitive mergers.

Other matters in the package include:
 Increasing the penalties for offences by body corporates from the existing maximum of $5 million up to $10 million;
 Removing the requirement for the Commerce Commission to give an undertaking as to damages when seeking interim injunctions; and
 Removing a provision in the existing bill that may have inadvertently prohibited some franchising and other similar pro-competitive agreements.

"The new supplementary order paper will be referred to the Commerce Select Committee before the middle of the year and the public will have an opportunity to provide submissions to the Committee," Trevor Mallard said.

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