Australia and New
Zealand
Competition Law Enforcement and
Governance
Why a joint assessment of New Zealand and
Australia?

Politically, economically and culturally very similar.

ANZCERTA:


–
Total freedom of movement of people and labour
–
(Almost) total freedom of trade and commerce
–
Mandate to harmonise business law
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Business law harmonisation:
–
Synchronising policy
–
Reducing regulatory barriers to trans-Tasman commerce (e.g.
mutual recognition of filings)
–
Ultimate ambition: a single agency exercising equivalent jurisdiction
in both countries
Result: convergence between New Zealand and Australian competition
policy and institutional arrangements
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Mandate
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Mandate
Competition
 Per se prohibitions:

Regulation

Objective:
–
Price fixing/hard core cartels
–
Mimic competitive outcomes
–
Resale price maintenance
–
–
Certain kinds of exclusionary
arrangements
Reserved for markets with
structurally limited
competition
Rule of reason:
–
Monopolisation
–
Cooperation/collusion
–
Mergers and acquisitions
(which can be cleared or
authorised)

Mechanisms:
–
Access regulation for
essential facilities
–
Information disclosure
–
Negotiate/arbitrate
–
Price/quality investment
pathways
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Penalties

Maximum (corporate) penalties of:
a)
$10,000,000; or
b)
Either:
i.
Three times the commercial gain attributable to
the infringement; or
ii.
If the commercial gain cannot be calculated,
10% of worldwide group turnover

Fines vary for individuals: $500,000 - $750,000

Ten years’ imprisonment for hard core cartel conduct
in Australia
Institutional structure
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Institutional structure
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Due process norms
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Due process norms

Due process based on civil rather than criminal expectations of
fairness

Principles of natural justice:
–
Right to be heard
–
Right to adequate notice of reasoning and evidence relied
upon

Investigations: agencies have substantial latitude, and
occasionally use them in an allegedly oppressive manner

Independence: ✔

Proportionality: ✔
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Due process norms (continued)


Rights of review and appeal: variable:
–
Regulatory appeals on merits severely constrained – typically
appeals are limited to questions of law or procedure
–
Very difficult to challenge even a manifest error in economic
reasoning
Challenges of criminalisation:
–
Use of compelled testimony
–
Giving appropriate cautions
–
Tainted evidence
–
Parallel criminal and civil proceedings
–
ACCC confident, given support from CDPP, but practitioners
convinced the first prosecutions will be problematic
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Institutional performance
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Public accountability

Accountable to courts, tribunals and ombudsman for day-to-day
activities

Accountable to Parliament and government departments for
overall performance and budget

Accountable to media

But note deliberate trade off between accountability and
independence
A-
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Timeliness

Mergers:
–
New Zealand: 40-65 days
–
Australia: Between two and twelve weeks depending on
complexity

Enforcement: traditionally unduly prolonged, but an area of focus
under the current administration and improving

Regulatory determinations: extremely prolonged as a result of
overly rigorous consultation obligations, to the ultimate
dissatisfaction of both the agencies and industry
B+
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Expertise

Agencies highly regarded by practitioners, and rated favourably in
international comparisons

Both agencies have successfully recruited talent internationally,
and contracted consultant expertise for specific workstreams

Weakness is probably in high level economic expertise:
comparatively fewer economics PhDs than other sophisticated
competition agencies (DOJ, OFT, DG Comp)

New Zealand courts can sit with a lay-member to assist with
expert economic evidence. Australian federal courts not similarly
equipped, but the ACT sits with two lay-members.
A-
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Investigative and sanctioning powers

Maximum penalties float according to size of company and
magnitude of commercial gain attributable to the breach

Broad powers to injunct conduct (including on an interim basis
through cease and desist orders) and to disqualify directors

Criminal penalties for hard core conduct in Australia (and soon to
be introduced in New Zealand)

In practice, significant penalties increasingly imposed

Wide range of investigative tools, and plenty of latitude to use
them

Chairs of the agencies reported no concerns with their existing
powers
A+
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Reasonable predictability
A-

Procedure governed either by statute or by guidelines issued by
agencies, and hence very predictable (with the exception of
investigations)

Merger control predictable given extensive guidelines on
substantive assessment and high level of know-how amongst
practitioners

Regulatory determinations predictable insofar as final outcomes
are signaled well in advance through draft reports and
consultation papers

Enforcement increasingly predictable due to enforcement policies
and guidelines, with the exception of monopolisation which is
completely unpredictable

Also, enforcement depends a lot on the personality of the current
chairperson
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Transparency

Strong culture of transparency:
–
Publicly available annual reports that report on activities and
budget
–
Press releases announcing significant decisions or actions
–
Full text registers of merger clearances and restrictive trade
practice authorisation
–
Freedom of information legislation
–
Wide range of information available on website

However, both agencies are a bit reluctant to publicise decisions
or outcomes that reflect poorly on them

Also, ACCC publishes less information on mergers due to its
informal merger clearance regime
A
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Public consultation

Public invited to participate in policy-making process through
consultations on:
–
Draft legislation
–
Agency guidelines

Public also invited to make submissions regarding merger
clearances, RTP authorisations and regulatory determinations

Enforcement proceeds through a private litigant model, so public
does not participate in agencies’ litigation strategy or enforcement
decisions
A
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