Misuse Of Market Power Guidelines (1)

The Commerce Commission is seeking feedback on its draft Misuse of Market Power Guidelines, with the deadline for submissions set for 18 November 2022.

Changes to section 36 of the Commerce Act, the prohibition on the misuse of market power, come into force in April 2023.  The changes mean that conduct by entities with substantial market power are subject to a competition test that considers the effect of the conduct (rather than just the purpose).  Our previous updates here and here set out further information about that amendment.

The draft Guidelines are intended to provide an overview of the Commission's proposed approach, noting that the Commission expects it to evolve over time.  The draft Guidelines set out how the Commission proposes to assess conduct under the amended section 36, including applying the "substantial lessening of competition" test to unilateral conduct.  While the draft Guidelines will provide a useful guide to the Commission's likely approach, the analysis of misuse of market power will continue to be very fact specific.

Similar to equivalent guidelines published by the Australian Competition and Consumer Commission, the draft Guidelines include discussion of the Commission's proposed approach to assessing conduct such as refusal to supply an input, margin/price squeezing, exclusive dealing, loyalty rebates, and tying/bundling.  They also set out types of conduct that the Commission considers are unlikely to raise issues under the new section 36 - eg genuine innovation or conduct that improves efficiency.

If you have any questions about the draft Guidelines, or would like assistance drafting feedback, please contact a member of our competition law team.