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Commerce Act 1986

Regulated goods or services - Preliminary provisions

52D: Meaning and application of claw-back

You could also call this:

"What 'claw-back' means and how it helps make prices fair for buyers and sellers"

Illustration for Commerce Act 1986

When the Commission talks about applying claw-back, it means they are doing one of two things. They are either making a supplier lower their prices for a little while to help consumers who paid too much, or they are letting a supplier get back some money they lost because their prices were too low. You need to know that claw-back is about fixing prices that were not fair. The Commission has to make sure that any changes to prices do not hurt the supplier or consumer too much.

If the Commission makes a supplier lower their prices, they have to do it in a way that does not cause the supplier too much financial trouble at one time. This means the price change is spread out over time. The Commission is trying to be fair to both the supplier and the consumer.

If the Commission lets a supplier get back some money, they have to do it in a way that does not shock consumers with big price changes. Again, the change is spread out over time to be fair. The Commission wants to help the supplier without hurting the consumer.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1685433.

Topics:
Money and consumer rights > Consumer protectionBusiness > Fair trading
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52C: Interpretation, or

"What special words mean in the Commerce Act 1986"

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52E: Overview of process if regulation imposed on goods or services, or

"What happens when the government regulates goods or services in New Zealand"

Part 4Regulated goods or services
Preliminary provisions

52DMeaning and application of claw-back

  1. A reference to the Commission applying claw-back is a reference to the Commission doing either of the following:

  2. requiring a supplier to lower its prices on a temporary basis in order to compensate consumers for some or all of any over-recovery that occurred under the prices previously charged by the supplier:
    1. allowing a supplier to recover some or all of any shortfall in its revenues that occurred under the prices previously charged by the supplier.

      1. If the Commission requires a supplier to lower its prices, it must also require that the lowering of prices must be spread over time in order to minimise undue financial hardship to the supplier.

      2. If the Commission allows a supplier to recover any shortfall, it must require that any recovery must be spread over time in order to minimise price shocks to consumers.

      Notes
      • Section 52D: inserted, on , by section 4 of the Commerce Amendment Act 2008 (2008 No 70).