Stronger Fair Trading Act a win for consumers and rule-abiding businesses
Ensuring New Zealand’s markets are competitive and fair is central to the Commerce Commission’s work.
The Government’s decision to strengthen penalties under the Fair Trading Act is a welcome step that supports our efforts to protect consumers and promote fair competition between businesses.
For the Commission, this is about business accountability. We’ve long called for higher penalties under the Act because fines had become little more than a ‘cost of doing business’ for some. When misleading conduct leads to profits that outweigh the penalties, that’s a problem.
Two of the major confirmed changes, as outlined in the Government’s announcementopen_in_new, include:
Penalty increases
Maximum fines for businesses will increase from $600,000 to $5 million. This sends a clear signal that misleading and deceptive behaviour won’t be tolerated. This is something the Courts have already recognised, noting large corporates often require large penalties to change behaviour. The recent case we took against Jetstaropen_in_new is one recent example.
Higher penalties mean fairer outcomes. Businesses playing by the rules shouldn’t be undercut by those who mislead or deceive. Consumers deserve transparency, and businesses deserve a level playing field.
Shift from a criminal regime to civil regime
The civil enforcement regime is better set up for us to deliver much higher financial penalties, which we know from experience is often a stronger deterrent than criminal convictions for big corporations, and removes any financial incentive for breaching the Act.
Changing to a civil regime also brings the Fair Trading Act into line with the Commerce Act, fair dealing under the Financial Markets Conduct Act and internationally with the Australian Competition and Consumer Commission 's approach, where civil penalties are standard.
Many of the cases we deal with under the Fair Trading Act include corporate conduct that is not ‘truly criminal’. Importantly, serious or deliberate misconduct will remain a criminal offence. Examples of this include serious product safety breaches, operating a pyramid scheme or obstructing the Commerce Commission.
Changes are expected to take effect by late 2026.
While enforcement is important, we’ll continue to offer guidance, education, and early engagement to help businesses do the right thing.