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Commerce Act 1986

3: Certain terms defined in relation to competition

You could also call this:

"What special words like 'competition' and 'market' mean in the Commerce Act"

Illustration for Commerce Act 1986

When you read the Commerce Act, you will see some terms that have special meanings. The term competition means workable or effective competition. You will also see the term market, which refers to a market in New Zealand for goods or services.

In this Act, a market includes goods or services that people can use instead of each other. For example, if you want to buy a drink, you can choose between different types of drinks like juice or soda. The Act looks at all the factors that affect competition in a market, including competition from goods or services supplied by people or companies outside New Zealand.

The Act also talks about lessening competition, which means hindering or preventing competition. When you look at a market, you need to consider all the factors that affect competition in that market. This includes competition from goods or services that people can use instead of each other.

The Act refers to sections like section 27 and section 28, which deal with contracts, arrangements, or understandings that can affect competition. It also talks about covenants, which are promises or agreements that can affect competition. In section 27 and section 28, a reference to a market includes a market where a person supplies or acquires goods or services.

The Act says that a provision of a contract, arrangement, or understanding can have the effect of substantially lessening competition in a market. This means that the provision, along with other provisions, can hinder or prevent competition. The same applies to covenants, which can also have the effect of substantially lessening competition. The Act also looks at conduct that can affect competition, like when a person engages in behaviour that hinders or prevents competition. In sections 27, 28, 36, and 36A, the Act considers whether conduct can substantially lessen competition in a market.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM87945.

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3Certain terms defined in relation to competition

  1. In this Act, competition means workable or effective competition.

  2. Every reference in this Act, except in section 36A, to the term market is a reference to a market in New Zealand for goods or services as well as other goods or services that, as a matter of fact and commercial common sense, are substitutable for them.

  3. Repealed

  4. Repealed

  5. In this Act, unless the context otherwise requires, references to the lessening of competition include references to the hindering or preventing of competition.

  6. For the purposes of this Act, the effect on competition in a market shall be determined by reference to all factors that affect competition in that market including competition from goods or services supplied or likely to be supplied by persons not resident or not carrying on business in New Zealand.

  7. In sections 27 and 28, a reference to a market in relation to the purpose or effect in respect of competition of a provision of a contract, arrangement, or understanding, or of a covenant, or of conduct, shall be read as including a reference to—

  8. a market in which a person who is a party to the contract, arrangement, or understanding, or any interconnected body corporate, or, as the case may be, the person or any associated person (within the meaning of section 28(7)) who requires the giving of, or gives the covenant, supplies or acquires or is likely to supply or acquire, or would, but for that provision, covenant, or conduct, supply or acquire or be likely to supply or acquire goods or services; and
    1. any other market in which those goods or services may be supplied or acquired.

      1. For the purposes of section 27, a provision of a contract, arrangement, or understanding shall be deemed to have or to be likely to have the effect of substantially lessening competition in a market if that provision and—

      2. the other provisions of that contract, arrangement, or understanding; or
        1. the provisions of any other contract, arrangement, or understanding to which that person or any interconnected body corporate is a party—
            1. taken together, have or are likely to have the effect of substantially lessening competition in that market.

          1. For the purposes of section 28, a covenant shall be deemed to have or to be likely to have the effect of substantially lessening competition in a market if—

          2. that covenant; and
            1. any other covenant to the benefit of which that person or an associated person (within the meaning of section 28(7)) is entitled or would be entitled if the covenant were enforceable—
                1. taken together, have or are likely to have the effect of substantially lessening competition in that market.

              1. For the purposes of sections 27, 28, 36, and 36A, the engaging in conduct shall be deemed to have or to be likely to have the effect of substantially lessening competition in a market if—

              2. the engaging in that conduct; and
                1. the engaging by that person in conduct of the same or a similar kind—
                    1. taken together, have or are likely to have the effect of substantially lessening competition in that market.

                  1. Repealed

                  2. Repealed
                  Notes
                  • Section 3(1): substituted, on , by section 3(1) of the Commerce Amendment Act 1990 (1990 No 41).
                  • Section 3(1): amended, on , by section 32(2)(d) of the Commerce (Cartels and Other Matters) Amendment Act 2017 (2017 No 40).
                  • Section 3(1A): inserted, on , by section 3(1) of the Commerce Amendment Act 1990 (1990 No 41).
                  • Section 3(1A): amended, on , by section 5(1) of the Commerce Amendment Act 2022 (2022 No 11).
                  • Section 3(1B): repealed, on , by section 5(2) of the Commerce Amendment Act 2022 (2022 No 11).
                  • Section 3(1C): repealed, on , by section 5(2) of the Commerce Amendment Act 2022 (2022 No 11).
                  • Section 3(7): amended, on , by section 5(3) of the Commerce Amendment Act 2022 (2022 No 11).
                  • Section 3(8): repealed, on , by section 9(4) of the Commerce Amendment Act 2001 (2001 No 32).
                  • Section 3(9): repealed, on , by section 11(3) of the Commerce Amendment Act 2001 (2001 No 32).