Amendments to the Commerce Act were signalled for mid-2026, aimed at strengthening the merger regime, addressing concentrated markets and predatory pricing, and streamlining Commission processes.
New Zealand has a small economy with concentrated markets in several sectors, which is the policy problem being addressed. For businesses, the practical consequences fall into two areas: buying other businesses, and how you compete.
The merger regime
Under the Commerce Act, an acquisition that would have the effect of substantially lessening competition in a market is prohibited. Clearance from the Commerce Commission is voluntary but commonly sought, because it provides certainty.
A strengthened regime generally means closer scrutiny of transactions in already-concentrated markets, and more attention to acquisitions that individually look small but cumulatively consolidate a sector — the “creeping acquisition” pattern.
For an acquisitive business, the practical implications:
- Assess competition risk early, before heads of agreement rather than during due diligence.
- Build clearance timeframes into the deal, with conditions and realistic dates.
- Be careful with pre-completion conduct. Acting as though a merger has completed before clearance — sharing competitively sensitive information, coordinating pricing, integrating operations — is a separate risk known as gun-jumping.
- Document the commercial rationale, since a transaction with genuine efficiency justifications is assessed differently from one whose main effect is removing a competitor.
Predatory pricing
Pricing below cost to drive out a competitor, with the intention of recovering later through higher prices, is the conduct being targeted.
The difficulty has always been distinguishing predation from vigorous competition, which is exactly what the law is meant to encourage. Low prices benefit consumers, and a business cutting price to win share is normally doing what the market wants.
For most businesses this is not a live risk. It becomes relevant where a business has substantial market power and prices in a way that only makes sense if the purpose is to remove a competitor rather than to win customers.
Unconscionable conduct is a current enforcement priority
Unconscionable conduct is one of a small number of Commerce Commission enforcement priorities, which signals where the Commission will direct its resources and litigation fund.
The prohibition covers conduct in trade that is unconscionable, assessed against factors including relative bargaining power, whether terms were reasonably necessary to protect legitimate interests, whether the affected party could understand the documents, and the use of undue influence or unfair tactics.
Areas where it arises in practice: dealings with small businesses by much larger counterparties, supply arrangements with one-sided terms, and aggressive enforcement of contractual rights in circumstances where doing so is disproportionate.
This is worth attention for any business with substantially more bargaining power than its counterparties.
Retail and supply chain conduct
The Commission has taken enforcement action in the grocery sector, including civil proceedings alleging a restriction on independently owned stores discounting selected products.
The general principle worth extracting: restricting a downstream party’s ability to set its own prices is a well-established competition risk. Resale price maintenance — requiring or pressuring a reseller not to discount below a specified price — is prohibited.
Suppliers can recommend prices. They cannot require them, and they cannot withhold supply or apply pressure to enforce them. The distinction matters and is regularly misunderstood by businesses that think a “recommended retail price” gives them more control than it does.
What this means practically
- If you set prices for resellers, check that “recommended” means recommended in practice as well as in the document.
- If you are acquiring, take competition advice early and build clearance into the timetable.
- If you hold significant market power, get advice before conduct that could be characterised as excluding a competitor.
- If you contract with much smaller counterparties, review your standard terms against the unconscionable conduct factors and the unfair contract terms provisions.
The Commerce Commission publishes its enforcement priorities, guidance and decisions free at comcom.govt.nz, and MBIE publishes market study material. Both are written for a general audience.
Reform measures described were signalled for mid-2026 and remain subject to legislation. Confirm the current position before acting. General information only, not legal advice.
