Powerful Firms and Monopolizing Conduct

Abstract

New Zealand’s efforts to rein in the anticompetitive conduct of market dominant firms has been disappointing overall. Its track record, in terms of the number of successful challenges, has been dismal. The early cases under the 1986 Act were promising with some notable victories for plaintiffs. But this was not to last. A large part of this chapter details the shadow cast by the Privy Council in the momentous Clear v Telecom saga in the mid-1990s. Their Lordships promulgated a stringent “counterfactual” test for contravening conduct under s 36 (the monopolization prohibition), one that almost spelt the death knell for meaningful enforcement of the section. A major attempt to restore the effectiveness of s 36 and reverse the effect of the London ruling was made by Parliament in 2001, but that proved unavailing. Moreover, the Supreme Court, the replacement for the Privy Council, determined that the counterfactual test ought to be retained. Despite the unabridged severity of the test, a few stubborn victories against monopolizing firms were still recorded. Nonetheless, policymakers have determined that reform is required. One proposal is to revise s 36 to embrace a SLC test. The chapter also considers the dormant intellectual property exemption in s 36. New Zealand’s experience of refusals to deal (“essential faculties” doctrine) and predatory pricing are also analysed.