NZ draft authorisations and mergers guidelines

NZ issues draft authorisation and acquisition guidelines

Published On 10/03/2013 | By Zach Meyers | Authorisations, Enforcement, Mergers, Notifications, Reform

On 8 March 2013, the NZ Commerce Commission published draft Authorisation Guidelines and Mergers and Acquisitions Guidelines for public consultation.

The Authorisation Guidelines outline the NZCC’s approach when considering authorisations of transactions that may otherwise breach NZ competition laws.  They will replace the Benefits and Detriments Guidelines (which set out how the NZCC decides whether the benefits of a transaction outweigh any impact on competition).

The key change is that the draft guidelines reflect a different approach to considering any productive and dynamic inefficiencies that arise from transactions.  The Benefits and Detriments Guidelines require inefficiencies to be balanced against public benefits.  The draft guidelines do not assume that these inefficiencies are detrimental to the public interest – instead, the NZCC would assess the impact of inefficiency on a case-by-case basis.

The Mergers and Acquisitions Guidelines outline the NZCC’s approach when assessing whether an acquisition would substantially lessen competition.  The draft guidelines have been updated to reflect recent NZ cases and the approach of regulators in the US, UK, Canada and Australia.  However, the NZCC notes its approach “has not changed significantly”.

There is no change to the existing “safe harbours” – the draft Mergers and Acquisitions Guidelines still provide that an acquisition is unlikely to substantially lessen competition if it would result in:

  • the three largest firms in the market having a combined market share below 70% and the merged firm having a market share of less than 40%; or
  • the three largest firms in the market having a combined market share of at least 70% but the merged firm having a market share of less than 20%.

Comments are due 9 April 2013 and the NZCC intends to finalise the drafts by the middle of the year.

 

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About The Author

Zach Meyers is a Solicitor in the Melbourne office of King & Wood Mallesons specialising in access regimes and telecommunications regulation.

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