NZ Government's ComCom Covid-19 directions are illegal and irrational says Union

Consumers' Union of Aotearoa
Press Release - Immediate Release
29 March 2020

The Consumers' Union of Aotearoa has issued a challenge against Kris Faafoi's ministerial press statement which instructed the Commerce Commission to relax its standards for supermarkets and telecommunications companies[*].

The Union's letter to the Minister and the Commerce Commission is enclosed with this press release.

While Kiwi consumers already pay more for groceries than any other OECD consumers, particularly relative to wages, the Government has decided supermarkets and other businesses should be given a free pass on their competition law obligations.

To add insult to injury, the Minister's statement is itself illegal.

The Commerce Commission is required to act independently, and the Minister has not exercised any legal powers under the Commerce Act in directing the Commerce Commission on what to do. Instead he has simply proclaimed - absent any legal basis - that the Commerce Commission ought to ignore its legal duties and obligations to Parliament and New Zealand consumers.

The Consumers' Union of Aotearoa applauds the speed and responsiveness of the NZ Government to addressing the impact of Coronavirus, but in this case it has been short-sighted and a growing pool of anecdotal evidence[+] suggests that harm is already being caused.

While the Consumers' Union of Aotearoa recognises COVID-19 / Coronavirus poses great challenges to the economy and to businesses, reducing competition law requirements is not the right way to go about addressing these. In fact, it will substantially worsen the economic conditions for 4.5 million New Zealanders who buy groceries and use telco services (i.e. everyone!). In times of crisis price gouging and predatory commercial behaviour is something Governments often take special powers to address. And this is the greatest crisis faced for decades, if not ever.

The only thing this Minister's statement will do is to make it easier for the unscrupulous to profit at the expense of the working poor, and particularly those in rural areas, and growing the profits of supermarket owners and telecommunications company shareholders.

The Minister should revoke his statement and apologise to the Commerce Commission and to the people of New Zealand. We cannot welcome profiteering and anti-competitive collaboration at these times, nor at any time.

[*] Government Issues Statement On Commercial Cooperation During COVID-19 (Press Release: NZ Govt., 22 March 2020)
[+] Budgeting Expert Says Vulnerable People Suffering From Countdown Removing Regular Specials (Press Release: Creating Wealth NZ, 29 March 2020)

Attachment: PRE-ACTION: MINISTER’S PRESS STATEMENT IS UNLAWFUL (.PDF)

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The Consumers’ Union of Aotearoa is an action group dedicated to improving the competitiveness of New Zealand’s market for the benefit of average consumers. If you want to get involved, write to us at consumersunionofaotearoa@gmail.com and follow us on Twitter at @of_aotearoa.

ENDS

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