Business raises concerns over onerous Competition Amendment Bill

Business and traders are concerned about the implications of the Competition Amendment Bill as the proposed changes will drastically change the way prohibited practices are investigated and prosecuted as well as how mergers are decided by the Competition Commission (CC) and Competition Tribunal. Comments on the bill closed at the end of last month. Daryl Dingley, head of competition at law firm Webber Wentzel, explained that the bill in its current form extended the CC’s regulation of prohibited practices, expanded the considerations for mergers and broadened its power of market inquiries “The authorities are definitely going to have more arrows in their quiver,” he said. This echoes the concerns expressed by industry and other legal experts about the proposed changes in which the remedies against anticompetitive conduct and the powers to intervene in perceived structural problems in markets have been expanded. An industry insider previously expressed doubts to FTW about the Competition Commission’s understanding of specific industry market forces when it blocked the proposed container business joint venture between Japanese shipping lines Nippon Yusen Kabushiki Kaisha (NYK), Mitsui OSK Lines (MOL) and Kawasaki Kisen Kaisha (K-line). And a local airline is now also under investigation by the CC for what it terms “predatory pricing” on a route (see page 10). The airline has denied these allegations but if the Bill is implemented, it could make it harder for logistics companies, shipping lines and airlines to prove their cases. Marianne Wagener, head of Antitrust and Competition at law firm Norton Rose Fulbright, pointed out that the draft bill would significantly change the abuse of dominance provisions in the Competition Act. She explained that the aim was to correct the “difficulties” that the competition authorities experienced in enforcing the abuse of dominance complaints. If the Bill goes through as proposed the burden will now be placed on the dominant firm to show that the price it charges is “reasonable” after a prima facie case against it has been established by the CC. In addition, it will become easier for the commission to prove predatory conduct by a dominant firm, as new cost standards are being introduced below which a firm is not entitled to charge customers.