Part III of the Act:
- prohibits mergers and acquisitions that substantially lessen competition
- allows the Commission to grant a clearance for acquisitions where it is satisfied that the proposed acquisition will not have or would not be likely to have the effect of substantially lessening of competition in a market
- allows the Commission to grant an authorisation for acquisitions that would result in a substantial lessening of competition, if the public benefits resulting from the acquisition are found to outweigh the detriments.
Mergers can bring many benefits to the New Zealand economy by making it possible for firms to be more efficient and innovative. However, some mergers also have the potential to lessen competition to the detriment of consumers.
Under the Commerce Act, certain agreements and mergers (together transactions) are prohibited as they can lead to anti-competitive outcomes, such as increased prices or lack of choice. However, the Commerce Act recognises that in some circumstances, an anti-competitive transaction may lead to sufficient public benefits that would outweigh the competitive harm.