The Legislation

A brief summary of legislation the Commerce Commission enforces

Commerce Act 1986

The aim of the Commerce Act is to promote competition in markets within New Zealand. It prohibits conduct that restricts competition (restrictive trade practices) and the purchase of a business's shares or assets if that purchase leads to a substantial lessening of competition in the market.

The Commerce Amendment Act 2008 introduced significant changes to those provisions of the Commerce Act 1986 that relate to the economic regulation of goods and services. The amendment directly affects the scope and role of the Commerce Commission in regulating electricity lines and gas pipeline services, and extends its responsibilities to include the regulation of specified airport services.

Fair Trading Act 1986

The Fair Trading Act was developed with the Commerce Act to encourage competition and to protect consumers from misleading and deceptive conduct and unfair trading practices. The Act applies to all aspects of the promotion and sale of goods and services - from advertising and pricing to sales techniques and finance agreements. The Act also applies to pyramid schemes.

The Fair Trading Act provides for consumer information standards covering:

  • country of origin (clothing and footwear) labelling
  • fibre content labelling
  • care labelling
  • consumer information notices relating to motor vehicles.

Under the Act, the Commission also enforces six product safety standards relating to:

  • baby walkers
  • pedal bicycles
  • flammability of children's night clothes
  • cigarette lighters
  • household cots
  • toys for children aged up to three years.

Credit Contracts and Consumer Finance Act 2003

The Commission has statutory responsibility for enforcing the Credit Contracts and Consumer Finance Act 2003. The Act:

  • states what information about the transactions consumers must be given, when it must be given and what form the information should take
  • sets minimum standards for some contractual terms; for example, the Act sets standards about the way in which interest is calculated and charged. There are also rules on credit fees and credit related insurance
  • covers the circumstances in which a consumer credit contract can be cancelled
  • provides rules covering early repayment of debt including rules about how much a creditor can charge in these circumstances
  • deals with the circumstances under which a consumer can ask to change a consumer credit contract
  • allows the Court to reopen contracts if they are oppressive
  • prevents creditors from enforcing contracts if they have not complied with particular provisions of the Act
  • sets up a regime of statutory damages that will apply automatically if particular provisions of the Act have been breached
  • makes breaching certain provisions of the Act a criminal offence punishable by fines and, in some cases, by imprisonment.

Dairy Industry Restructuring Act 2001

The Commission has both enforcement and adjudication roles under the Dairy Industry Restructuring Act. The Act provides for the Commission to undertake enforcement action and requires the Commission to issue determinations to resolve disputes between Fonterra and other parties.

Telecommunications Act 2001

The Telecommunications Act regulates the supply of telecommunications services in New Zealand. It requires the Commission to make determinations in respect of designated access and specified services and to undertake costing and monitoring activities.

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