Govt Strengthens Commerce Act to Boost Competition and Protect Consumers

The Government has announced sweeping reforms to the Commerce Act, marking the first major update in nearly two decades. The changes are designed to protect consumers, strengthen competition, and give businesses greater clarity when navigating markets. Economic Growth Minister Nicola Willis and Commerce and Consumer Affairs Minister Scott Simpson jointly unveiled the reform package, calling it a cornerstone of the Government’s economic growth strategy.

Why the Commerce Act Is Being Reformed

Minister Willis stressed that outdated competition rules have allowed dominant firms to entrench their market power, creating barriers to growth and innovation.

“Competition is a key driver of growth, innovation, and productivity. Consumers and businesses thrive when markets are open and fair. But our current settings are outdated, lack clarity, and have led to some of our most important markets being dominated by only a handful of players,” she said.

The reforms are intended to level the playing field, giving smaller competitors a fair chance to succeed while ensuring that consumers benefit from lower prices, more choice, and better-quality services.

Key Reforms Under the New Legislation

The package of reforms contains several major changes to how competition is regulated in New Zealand:

• Banning unfair tactics: Anti-competitive practices such as creeping acquisitions (buying small stakes in competitors over time to gain control) and predatory pricing (undercutting rivals to drive them out of the market) will be explicitly prohibited.

• Clearer merger rules: Businesses will have stronger guidance when planning mergers, ensuring certainty while preventing harmful market concentration.

• A stronger Commerce Commission: Structural reforms will separate governance and regulatory functions, enabling the Commission to act more efficiently and transparently.

• Streamlined collaboration approvals: Businesses will be able to collaborate more easily where this delivers public benefits without undermining competition—for example, joint infrastructure projects or shared supply chain solutions.

• Voluntary commitments: Companies will be allowed to offer undertakings during merger applications to limit their market power, providing flexibility while still protecting consumers.

Strengthening the Commerce Commission

Minister Simpson explained that the reforms were shaped by an independent review that found the Commerce Commission had outgrown its current structure.

“At present, the Commission’s board is responsible for both governance and regulatory decisions, which has created inefficiencies. By separating these functions, the Commission will be able to deliver better outcomes for consumers,” Simpson said.

The strengthened Commission will also gain new enforcement tools, including:

• The ability to pause or “call in” risky mergers before completion, ensuring problematic deals are properly assessed.

• The power to accept behavioural undertakings from companies to address competition concerns.

• Statutory timeframes for merger decisions, ensuring faster, more transparent processes for businesses and the public.

Preventing Market Concentration

The reforms are specifically designed to prevent dominant firms from consolidating power and shutting out competitors.

“Importantly, these changes lift the bar on which mergers can proceed,” Simpson said. “This will prevent dominant firms entrenching their power and give businesses and consumers more choice, sharper prices, and fairer markets.”

Legislative Timeline

The amendments to the Commerce Act are scheduled to be introduced to Parliament before Christmas 2025 and passed by mid-2026.

Part of the Wider Growth Strategy

The reforms are a key component of the Government’s broader Going for Growth programme. Alongside the Commerce Act updates, Minister Willis released the Competitive Business Settings update, which sets out wider measures to make it easier for businesses to operate, expand, and create jobs.

“These changes provide more certainty and reliability for businesses, and are what this Government was elected to deliver,” Willis said.

Looking Ahead

By modernising the Commerce Act, the Government aims to create a fairer, more dynamic economy where competition drives down prices, fosters innovation, and benefits all New Zealanders. The strengthened Commerce Commission will act as a central guardian of fairness, ensuring that markets remain competitive and accessible in the decades ahead.