Wednesday , 19 June 2019
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NZ telecoms sector under scrutiny by competition enforcement agency

NZ telecoms sector under scrutiny by competition enforcement agency

Billing, contract terms, marketing and switching practices in the New Zealand telecommunications industry head the list of priority areas for the country’s competition regulator The Commerce Commission’s focus over the next 12-months.

Along with retail telecommunications, online retail and issues associated with online shopping for consumers and businesses alike, will also be a priority focus for the Commission – as well as responsible lending, motor vehicle sales, non-notified mergers and electricity distributors’ service quality.

The Commission announced its priority listing for the year ahead on Thursday with a focus on a number of areas which it says it will always regard as a priority due to the potential significant impact on consumers, business or markets in New Zealand.

On the telecommunications sector, Commission chairman Dr Mark Berry said the Commission had already undertaken a lot of work in the sector over the past year “and will continue to target retail services”.

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“In particular we will be focused on billing, contract terms, marketing and switching practices. Likewise we continue to see lenders failing to comply with responsible lending principles, putting many borrowers at risk of hardship, and this will remain a priority area for us in our credit work.”

Dr Berry said the Commission’s review of all sectors will include cases that involve “significant harm to consumers or the potential for significant harm such as cartel and anti-competitive conduct and product safety and construction cases”.

“The priority areas we are targeting affect large numbers of consumers every day and we will be working with businesses to tackle the particular issues we are concerned about, both through education and enforcement”.

Dr Berry said motor vehicle sales are a big part of New Zealand’s retail economy and “we continue to receive a range of complaints about this sector, including misrepresentations about vehicle quality and consumers’ rights and the failure of dealers to provide redress for serious faults”.

“We will identify the systemic issues consumers are facing and step up our education efforts in this area. Separately, with more and more New Zealanders routinely making purchases on the internet we will be taking a close look at the issues associated with online shopping, for consumers and businesses alike.”

New Zealand is one of a few jurisdictions with a voluntary merger clearance regime and the Commission is seeing an increase in non-notified mergers.

“Over the past two years we have opened five investigations into non-notified mergers.  The success of a voluntary regime relies on the credible threat of enforcement proceedings so we will act quickly in these cases to prevent adverse impacts on competition in markets,” Dr Berry said.

“Lastly, in our regulation work this year we will focus on the quality of service provided by electricity distributors (lines companies). We also want to better understand why a number of distributors have failed to meet the minimum standards for network reliability and what that tells us about the state of their networks.”

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