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Chris The Lawyer
Chris The Lawyer, Lawyer
Category: New Zealand Law
Satisfied Customers: 22977
Experience:  38 years qualified as a lawyer; LLB, MMgt and FAMINZ.
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We are an expanding importer and reseller of Blinds and

Customer Question

We are an expanding importer and reseller of Blinds and awnings using contractors to install product sold. The main contractor we commission had just reneged on installation of a number of projects we agreed to employ his services for prior to Christmas. His email to us indicates pressure from a larger player in the industry whom he contracts more time to is the driver of this decision to renegade on our installation as agreed. Basically they have told him if he continue to install for us he will be re-priorotised in their business. Doe this equate to anti competitive behavior by our competition?
Submitted: 1 year ago.
Category: New Zealand Law
Expert:  Chris The Lawyer replied 1 year ago.

Some businesses have substantial market power. This in itself is not illegal. But, when a business has a substantial degree of market power and takes advantage of that power for an anti-competitive purpose, competition can be harmed. Competition delivers lower prices, better quality, more choice and greater innovation to New Zealand consumers.

Sometimes a business with market power can take advantage of its market power to drive a competitor out of business or to prevent a new competitor from starting up. This can reduce or eliminate competition from a market, harming consumers and the wider economy.

Section 36 of the Commerce Act makes it illegal for any business with a substantial degree of market power to take advantage of that power to deter or prevent rival businesses from competing effectively.

Section 36 - key points

  • A business will break the law if it has a substantial degree of market power, takes advantage of that power and has an anti-competitive purpose.
  • It is not illegal for a business to have a substantial degree of market power. But taking advantage of that market power to harm competition is illegal.
  • High prices in themselves are not illegal.
  • There are many types of behaviour that are illegal under section 36. It is often hard to distinguish anti-competitive behaviour from aggressive, but legal, competitive behaviour.
  • Aggressive rivalry by large businesses may not be illegal - large businesses also have a right to compete. But they are not allowed to take advantage of their market power to prevent others from competing effectively.
  • A refusal to deal with or supply someone is not, in itself, illegal.
  • That is from the Commerce Commission website. I think you should complain to them, as this does appear to offend against their criteria as this goes beyong vigorous competition in the marketplace