Misuse of Market Power Laws: A Small Economy in a Big World
This article examines the recent amendment to New Zealand's Commerce Act 1986, which replaces the purpose-based misuse of market power prohibition with an effects-based test. We explore the practical challenges of misuse of market power regulation in the context of small market economies, with reference to global digital platforms as a topical case study. The new effects-based test potentially will provide a better mechanism for distinguishing competition on its merits from exclusionary conduct, but practical impediments to effective enforcement remain. We recommend allowing the new effects test to bed in before considering whether any other, more bespoke, regulation of digital platforms is desirable. We note that better international co-ordination will also enable New Zealand to benefit from initiatives led by international regulators in this space, to the extent that actions by such regulators have the propensity to benefit New Zealand consumers.