Australia and New Zealand

1. Australia and New Zealand Competition Law Enforcement and Governance

2. Why a joint assessment of New Zealand and Australia? • Politically, economically and culturally very similar. • ANZCERTA: • Total freedom of movement of people and labour • (Almost) total freedom of trade and commerce • Mandate to harmonise business law • Business law harmonisation: • Synchronising policy • Reducing regulatory barriers to trans-Tasman commerce (e.g. mutual recognition of filings) • Ultimate ambition: a single agency exercising equivalent jurisdiction in both countries • Result: convergence between New Zealand and Australian competition policy and institutional arrangements

3. Mandate

4. Mandate Competition Regulation Objective: Mimic competitive outcomes Reserved for markets with structurally limited competition Mechanisms: Access regulation for essential facilities Information disclosure Negotiate/arbitrate Price/quality investment pathways • Per se prohibitions: • Price fixing/hard core cartels • Resale price maintenance • Certain kinds of exclusionary arrangements • Rule of reason: • Monopolisation • Cooperation/collusion • Mergers and acquisitions (which can be cleared or authorised)

5. Penalties • Maximum (corporate) penalties of: • $10,000,000; or • Either: • Three times the commercial gain attributable to the infringement; or • If the commercial gain cannot be calculated, 10% of worldwide group turnover • Fines vary for individuals: $500,000 - $750,000 • Ten years’ imprisonment for hard core cartel conduct in Australia

6. Institutional structure

7. Institutional structure

8. Due process norms

9. Due process norms • Due process based on civil rather than criminal expectations of fairness • Principles of natural justice: • Right to be heard • Right to adequate notice of reasoning and evidence relied upon • Investigations: agencies have substantial latitude, and occasionally use them in an allegedly oppressive manner • Independence: ✔ • Proportionality: ✔

10. Due process norms (continued) • Rights of review and appeal: variable: • Regulatory appeals on merits severely constrained – typically appeals are limited to questions of law or procedure • Very difficult to challenge even a manifest error in economic reasoning • Challenges of criminalisation: • Use of compelled testimony • Giving appropriate cautions • Tainted evidence • Parallel criminal and civil proceedings • ACCC confident, given support from CDPP, but practitioners convinced the first prosecutions will be problematic

11. Institutional performance

12. Public accountability • Accountable to courts, tribunals and ombudsman for day-to-day activities • Accountable to Parliament and government departments for overall performance and budget • Accountable to media • But note deliberate trade off between accountability and independence A-

13. Timeliness • Mergers: • New Zealand: 40-65 days • Australia: Between two and twelve weeks depending on complexity • Enforcement: traditionally unduly prolonged, but an area of focus under the current administration and improving • Regulatory determinations: extremely prolonged as a result of overly rigorous consultation obligations, to the ultimate dissatisfaction of both the agencies and industry B+

14. Expertise • Agencies highly regarded by practitioners, and rated favourably in international comparisons • Both agencies have successfully recruited talent internationally, and contracted consultant expertise for specific workstreams • Weakness is probably in high level economic expertise: comparatively fewer economics PhDs than other sophisticated competition agencies (DOJ, OFT, DG Comp) • New Zealand courts can sit with a lay-member to assist with expert economic evidence. Australian federal courts not similarly equipped, but the ACT sits with two lay-members. A-

15. Investigative and sanctioning powers • Maximum penalties float according to size of company and magnitude of commercial gain attributable to the breach • Broad powers to injunct conduct (including on an interim basis through cease and desist orders) and to disqualify directors • Criminal penalties for hard core conduct in Australia (and soon to be introduced in New Zealand) • In practice, significant penalties increasingly imposed • Wide range of investigative tools, and plenty of latitude to use them • Chairs of the agencies reported no concerns with their existing powers A+

16. Reasonable predictability A- • Procedure governed either by statute or by guidelines issued by agencies, and hence very predictable (with the exception of investigations) • Merger control predictable given extensive guidelines on substantive assessment and high level of know-how amongst practitioners • Regulatory determinations predictable insofar as final outcomes are signaled well in advance through draft reports and consultation papers • Enforcement increasingly predictable due to enforcement policies and guidelines, with the exception of monopolisation which is completely unpredictable • Also, enforcement depends a lot on the personality of the current chairperson

17. Transparency • Strong culture of transparency: • Publicly available annual reports that report on activities and budget • Press releases announcing significant decisions or actions • Full text registers of merger clearances and restrictive trade practice authorisation • Freedom of information legislation • Wide range of information available on website • However, both agencies are a bit reluctant to publicise decisions or outcomes that reflect poorly on them • Also, ACCC publishes less information on mergers due to its informal merger clearance regime A

18. Public consultation • Public invited to participate in policy-making process through consultations on: • Draft legislation • Agency guidelines • Public also invited to make submissions regarding merger clearances, RTP authorisations and regulatory determinations • Enforcement proceeds through a private litigant model, so public does not participate in agencies’ litigation strategy or enforcement decisions A