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Commerce Act 1986
Restrictive trade practices
Practices substantially lessening competition conditional upon authorisation
35: Contracts or covenants subject to authorisation not prohibited under certain conditions

1Short Title and commencement 1APurpose 2Interpretation 3Certain terms defined in relation to competition 3ACommission to consider efficiency 4Application of Act 5Application of Act to the Crown 6Application of Act to Crown corporations 6ASpecial provisions relating to application of Act to the Crown in right of Australia and to Australian Crown corporations 6BCrown and Crown corporations not immune from jurisdiction in relation to certain provisions of Competition and Consumer Act 2010 6CTransitional, savings, and related provisions 6CApplication of Evidence Amendment Act 1980 7Relationship with law on restraint of trade

Part 1:
The Commerce Commission

8Establishment of Commission 8AApplication of Crown Entities Act 2004 9Membership of Commission 10Terms and conditions of appointment 11Associate members 12Chairperson and deputy chairperson 13Termination of appointment of members 14Disclosure of financial interests 15Meetings of Commission 16Chairperson may direct Commission to sit in Divisions 17Assent to determination 18Officers and employees 18APersonnel policy 18BEqual employment opportunities 18CChoice of procedure 18DSuperannuation and retiring allowances 19Money to be appropriated by Parliament for purposes of this Act 20Funds of Commission 21Bank accounts 22Crown entity 23Investment of money 24Exemption from income tax 25Functions of Commission in relation to dissemination of information 26Commission to have regard to economic policies of Government

Part 2:
Restrictive trade practices

Contracts, arrangements, understandings, or covenants substantially lessening competition

27Contracts, arrangements, or understandings substantially lessening competition prohibited 28Covenants substantially lessening competition prohibited 28ACertain grocery-related covenants are treated as prohibited and unenforceable 28BProcess for voluntary removal of grocery-related covenant from register of land 28CProcess for designations for purpose of section 28A 28DCommission may require designated grocery retailer to supply information about contract, etc, to which section 28A may apply 29Contracts, arrangements, or understandings containing exclusionary provisions prohibited

Part 3:
Business acquisitions

47Certain acquisitions prohibited 47ADeclaration relating to acquisition by overseas person 47BOrders against New Zealand bodies corporate following declaration under section 47A 47CApplication by Commission for declaration or order 47DRevocation and variation of declarations and orders 48Bare transfer of market dominance excluded 49Application to building societies 50Certain merger or takeover proposals require clearance or authorisation 51Contracts subject to condition of clearance or authorisation

Part 3A:
Competition studies

48Interpretation 49Functions of Commission under this Part 50Commission may carry out competition study 51Minister may require Commission to carry out competition study 51ACompetition study terms of reference 51BPreparation of competition report 51CConsultation on draft competition report 51DPublication and status of competition report 51EMinister must respond to competition report

Part 4:
Regulated goods or services

Preliminary provisions

52Overview of Part 52APurpose of Part 52BOutline of Part 52CInterpretation 52DMeaning and application of claw-back

Regulating particular goods or services

52EOverview of process if regulation imposed on goods or services 52FEffect of goods or services being subject to regulation 52GWhen goods or services may be regulated

Commission inquiry

52HHow inquiry triggered 52ICommission inquiry into particular goods or services 52JProcess of inquiry 52KCommission's recommendation following inquiry

Order in Council imposing regulation

52LMinister's consideration 52MMinister's decision and recommendation 52NOrder in Council imposing regulation 52ORevocation or amendment of Order in Council

Commission determination about how regulation applies

52PDeterminations by Commission under this section 52QAmendment of section 52P determination

Input methodologies

52RPurpose of input methodologies 52SHow published input methodologies apply 52TMatters covered by input methodologies 52UWhen input methodologies must be determined 52VCommission process for determining input methodologies 52WStatus of input methodologies, amendments, and revocations 52XAmendment of input methodologies 52YReview and date of publication of input methodologies

Appeals against input methodology determinations

52ZAppeals against input methodology determinations 52ZAProcess for appeals 53Input methodology applies pending outcome of appeal

Information disclosure regulation

53APurpose of information disclosure regulation 53BEffect of being subject to information disclosure regulation 53CSection 52P determination to set out information disclosure requirements 53DConsolidated information may also be required 53ECharge for providing copies to public 53FLimited exception to obligation to apply input methodologies

Negotiate/arbitrate regulation

53GPurpose of negotiate/arbitrate regulation 53HOverview of negotiate/arbitrate regulation 53ISection 52P determination to set out requirements for application of negotiate/arbitrate regulation 53JCompulsory arbitration

Default/customised price-quality regulation

53KPurpose of default/customised price-quality regulation 53LOverview of default/customised price-quality regulation 53MContent and timing of price-quality paths 53NMonitoring compliance with price-quality paths

Default price-quality path

53OSection 52P determination to set out requirements of default price-quality paths 53PResetting starting prices, rates of change, and quality standards

Customised price-quality paths

53QSupplier may propose customised price-quality path 53REffect of making proposal for customised price-quality path 53SPreliminary assessment of proposal 53TProcess and timing for assessing proposal 53UExtension of time frames 53VDetermination setting customised price-quality path 53WTerm of customised price-quality paths 53XWhat happens when customised price-quality path ends 53YCommission's costs relating to assessing, setting, and reconsidering customised price-quality path 53ZPrioritisation by Commission 53ZAWhat happens if Commission does not make decision within time frame

What happens to price-quality paths if input methodologies change

53ZBWhat happens to price-quality paths if input methodologies change

Individual price-quality regulation

53ZCPrice-quality path for individual businesses

Miscellaneous provisions

53ZDPowers of Commission under this Part 53ZELevies 53ZFMaterial may be incorporated by reference 53ZGPower to exempt disclosure of commercially sensitive information

Electricity lines services

Application, overview, and interpretation

54Overview of how subpart applies 54AOverview of when subpart applies 54BInterpretation for subpart 54CMeaning of electricity lines services 54DDefinition of consumer-owned

Imposition of regulation under this Part

54EElectricity lines services declared to be regulated 54FAll electricity lines services are subject to information disclosure regulation 54GCertain electricity lines services are also subject to default/customised price-quality regulation 54HHow exempt status can be lost and default/customised price-quality regulation can be applied to consumer-owned suppliers 54ICommission must make section 52P determination specifying how subpart applies 54JSection 52P determinations setting out default price-quality paths applying from 1 April 2009 54KSection 52P determinations setting out default price-quality paths applying from 1 April 2010

Transitional arrangements

54LAdministrative settlements made before 1 April 2009 (other than with Transpower)54MAdministrative settlements with Transpower made before 1 April 2009 54NBreaches of thresholds and default price-quality paths before 1 April 2010 54OBreaches of control imposed, or administrative settlements entered into, after 1 April 2009 54PProposals for customised price-quality paths

Energy efficiency

54QEnergy efficiency

Transpower grid upgrade plans and capital expenditure proposals

54RApproval of Transpower's grid upgrade plans 54SCommission to prepare input methodology for capital expenditure proposals 54TProcedure before jurisdiction order can be made 54ULevies during transition in jurisdiction

Interface with Electricity Industry Act 2010

54VImpact of certain decisions made under Electricity Industry Act 2010

Savings provisions

54WSavings provision relating to existing information disclosure requirements 54XSavings provision for existing levy regulations for electricity lines businesses

Gas pipeline services

Overview and interpretation

55Overview of subpart 55AMeaning of gas pipeline services

Imposition of regulation under this Part

55BGas pipeline services declared to be regulated 55CAll gas pipeline services are subject to information disclosure regulation 55DAll gas pipeline services are subject to price-quality regulation 55ECommission must make section 52P determination specifying how subpart applies 55FSection 52P determinations setting out first default price-quality paths

Services controlled by virtue of Commerce (Control of Natural Gas Services) Order 2005

55GExisting order, authorisations, and undertakings continue to apply until 1 July 2012 (or earlier expiry)55HHow price-quality regulation under this Part applies after 1 July 2012 (or earlier expiry)

Interface with Gas Act 1992

55IImpact of certain decisions made under Gas Act 1992

Savings provisions

55JSavings provision until Commission publishes information disclosure requirements 55KSavings provision for existing levy regulations for services controlled under Commerce (Control of Natural Gas Services) Order 2005

Airport services

Overview and interpretation

56Overview of subpart 56AInterpretation

Specified airport services regulated under this Part

56BSpecified airport services declared to be regulated 56CSpecified airport services subject to information disclosure regulation 56DSpecified airport services subject to additional regulation if imposed by Order in Council

Duty to supply information to Secretary

56EDuty to supply information to Secretary

Commission inquiry into regulation of specified airport services

56FHow inquiry triggered 56GCommission inquiry 56HCommission’s recommendations following inquiry

Order in Council imposing additional type of regulation

56IMinister must consider Commission’s recommendation 56JMinister’s decision and recommendation 56KOrder in Council imposing additional type of regulation 56LCommission determination about how regulation applies

Declaring services to be specified airport services

56MOrder in Council declaring specified airport services

Subpart 2 not limited

56NSubpart 2 not limited

Water services

57Overview of subpart 57Commission process 57AInterpretation for this subpart 57ATechnical provisions relating to declaration of control 57BOrder in Council declaring water services 57BRecords to be kept for control purposes

Water services regulated under this Part

57CWater services declared to be regulated 57COther Acts relating to price control not affected 57CAImpact of certain decisions made under Gas Act 1992 57DWater supply and wastewater services 57EStormwater services 57FWatercare Services Limited, and any subsidiary of Watercare Services Limited, subject to price-quality regulation

Commission may recommend further regulation or deregulation

57GCommission may recommend further regulation or deregulation 57HProcess for Commission’s recommendation 57IInquiry not required

Order in Council

57JMinister's consideration 57KMinister's decision and recommendation 57LOrder in Council imposing regulation 57MCommission not required to consult on non-material amendment

Determinations

57NCommission determination about how regulation applies 57OSection 52P determinations apply to each type of regulation imposed 57PSection 52P determinations without input methodologies 57QAdditional matters relating to section 52P determinations

Other functions of Commission in relation to water services

57RWater efficiency 57SCommission must take into account duties owed by suppliers of water services 57TCommission’s functions do not extend to regulating safety of drinking water

Additional matters

57UCommission may grant exemption to local authority 57VAdditional matters relating to regulation of water services

Part 4A:
Consumer protection in relation to water services

Overview, purpose, interpretation, and application of this Part

57WOverview of this Part 57XPurpose of this Part 57YInterpretation of this Part 57ZApplication of this Part

Information disclosure requirements relating to protecting consumers of water services

57ZAInformation disclosure requirements relating to consumer protection

Other measures relating to protecting consumers of water services

Regulations

57ZBRegulations relating to protecting consumers of water services

Service quality codes

57ZCPurpose of service quality code 57ZDCommission may issue guidelines to industry about service quality codes 57ZECommission review of industry service quality codes 57ZFCommission may make Commission service quality code 57ZGContents of Commission service quality code 57ZHSuppliers must comply with Commission service quality code 57ZIProcess for making or amending Commission service quality code

Compliance

57ZJCommission must monitor compliance 57ZKWhen court may make pecuniary penalty order 57ZLMaximum amount of pecuniary penalty 57ZMCourt may make compensatory orders for contravention of Commission service quality code 57ZNCourt may grant injunctions for contravention of Commission service quality code 57ZOOrder requiring regulations to be complied with 57ZPOffence relating to Commission service quality codes

Additional remedies in relation to failure to comply with Commission service quality code

57ZQOverview of sections 57ZR to 57ZT 57ZROrder to disclose information 57ZSGeneral order for failure to comply with Commission service quality code 57ZTOther order for failure to comply with Commission service quality code 57ZURemedies 57ZVApplication of Part 6 undertakings and injunction provisions

Other provisions

57ZWCommission must take into account duties owed by suppliers of water services 57ZXCommission’s functions do not extend to regulating safety of drinking water 57ZYLevies

Part 4A:
Provisions applicable to electricity industry

57DInterpretation 57DAAMeaning of electricity lines business 57DAABMeaning of electricity supply business 57DABody that exercises jurisdiction under this Part 57DBTransfer of jurisdiction in respect of Transpower 57DCTransfer of jurisdiction relating to other large electricity lines businesses 57DDProcedure before jurisdiction order can be made 57DELevies during transition in jurisdiction 57DFMinisterial powers

Controlled goods or services

57EPurpose 57FCommission, not Minister, may declare that goods or services supplied by large electricity lines businesses are controlled 57GThresholds for declaration of control 57GAIncorporation by reference of material in thresholds 57GBEffect of amendments to, or replacement of, material incorporated by reference in thresholds 57GCAmendments to, or replacement of, material incorporated by reference to be of same general character as original material 57GDProof of material incorporated by reference 57GEEffect of expiry of material incorporated by reference 57GFRequirement to consult 57GGAccess to material incorporated by reference 57HProcess for making decisions on declaration of control 57IProcess before declaration made 57JEffect of declaration of control 57KPriorities 57LMaximum of 5 years for duration of declaration 57MAuthorisations and undertakings 57MAImpact of certain decisions made under Electricity Act 1992 57NCommission may lift control

Transpower's pricing methodology

57OCommission may be required to authorise Transpower's pricing methodology 57PAuthorisations in respect of Transpower's pricing methodology 57QAuthorisations and undertakings 57REnforcement of authorisations 57SRevocation of authorisations

Information disclosure

57TInformation disclosure 57UInformation to be supplied to Commerce Commission 57VCommerce Commission to publish summaries 57WReasonable charge may be imposed for providing copies of statements

Asset valuations

Recalibration of asset values of large electricity line owners

57XPurpose of recalibrations 57YInterpretation 57ZLarge electricity line owners must supply valuation to Commerce Commission 57ZAComprehensive audit of asset values of large electricity line owners 57ZBProcedure after audit of asset values carried out 57ZCOutcome of audit of asset values

Review of valuation methodologies

57ZDReview of valuation methodologies 57ZEProcess when carrying out review of valuation methodologies

General provisions

57ZFPowers of Commission 57ZGPowers of entry and inspection 57ZHAuthorised persons to prove identity 57ZIOffence to obstruct authorised persons 57ZJOther offences 57ZKLevy of electricity lines businesses

Part 5:
Authorisations and clearances

Restrictive trade practices

58Commission may grant authorisation for restrictive trade practices 58AEffect of authorisation 58BAdditional provisions relating to authorisations 59Contracts or covenants subject to authorisation not prohibited under certain conditions 59AWhen Commission may grant authorisation 59BContraventions not prevented by granting of authorisation under section 59 or section 59A 60Procedure for applications for authorisation of restrictive trade practices 61Determination of applications for authorisation of restrictive trade practices 62Commission to prepare draft determination in relation to restrictive trade practices 63Commission may grant provisional authorisation 64Procedure at conference 65Commission may vary or revoke authorisations 65AAACommission may grant interim authorisation 65AAApplications during epidemic period 65ABModifications in relation to application under section 65AA 65ACModifications in relation to certain applications made during epidemic period 65ADProvisional authorisations for certain applications made during epidemic period 65AERepeal of sections 65AA to 65AE 65ACommission may give clearances relating to cartel provisions 65BEffect of clearance under section 65A 65CProcedures relating to clearances 65DRevocation of clearances

Business acquisitions

66Commission may give clearances for business acquisitions 67Commission may grant authorisations for business acquisitions 68Provisions applying to applications for clearances and authorisations for business acquisitions 69Effect of clearance or authorisation 69ACommission may accept undertakings 69ABAuthorisation or clearance void if undertaking contravened 69ACVariation of undertaking 69BConferences in relation to business acquisitions

Authorisations in respect of controlled goods or services

70Authorisations in respect of prices, revenues, and quality standards 70AConsiderations to be observed by Commission 70BProcedure for making authorisations 70CRemedies and penalties if overcharging or quality standards breached 70DTerms of authorisations 70EInvestigations and audits 70FRevocation and amendment of authorisations 71Provisional authorisations 72Alternative undertakings 73Conferences in relation to authorisations about controlled goods or services 74Levies

Part 6:
Enforcement, remedies, and appeals

Power to accept undertakings

74AACommission may accept undertakings 74ACommission may accept undertakings 74BMatters included in undertakings 74CEnforcement of undertakings 74DPecuniary penalties for contravention of cease and desist order

Jurisdiction of courts

75Jurisdiction of High Court 76Jurisdiction of District Court 77Additional lay members of High Court for purposes of appellate jurisdiction in respect of Commission determinations 78Lay members of High Court in certain cases 79Evidence not otherwise admissible

Proceedings for pecuniary penalties

79AProceedings for pecuniary penalties 79BRelationship between pecuniary penalties and criminal liability

Restrictive trade practices

80Pecuniary penalties relating to restrictive trade practices 80ARestriction on indemnities relating to contraventions of section 30 80BPecuniary penalties for contravention of section 80A 80CCourt may order certain persons to be excluded from management of body corporate 80DApplication for order under section 80C 80EOffence to act in contravention of order made under section 80C 81Injunctions may be granted by court for contravention of Part 2 82Actions for damages for contravention of Part 2 82AExemplary damages for contravention of Part 2 82BOffence relating to cartel prohibition 82CDefence relating to exceptions to cartel prohibition 82DDisclosure by defendant in cartel prosecution 82EConsequences of failure to disclose under section 82D

Business acquisitions

83Pecuniary penalties relating to business acquisitions 84Injunctions may be granted by court for contravention of Part 3 or undertaking 84AActions for damages for contravention of Part 3 85Court may order divestiture of assets or shares in respect of contravention of section 47 85APecuniary penalties for contravention of undertaking 85BCourt may order divestiture of assets or shares in respect of contravention of undertaking 85CMatters court must not take into account under sections 85A and 85B

Regulated goods or services

86Pecuniary penalty for contravening information disclosure requirement 86AOrder requiring information disclosure requirement to be complied with 86BOffences relating to information disclosure regulation 86COrders where negotiate/arbitrate regulation applies 87Pecuniary penalty for contravening price-quality, quality, or performance requirements 87ACompensation for contravention of price-quality, quality, or performance requirement 87BOffence relating to price-quality, quality, or performance requirement regulation 87CInjunction and other orders relating to price-quality, quality, or performance requirement regulation

Injunctions generally

88General provisions relating to granting of injunctions 88AWhen undertaking as to damages not required by Commission 89Other orders 90Conduct by employees, agents, and others

Appeals from determinations of Commission

91Appeals in relation to determinations by Commission 92Persons entitled to appeal 93Determination of appeals 94Court may refer appeals back for reconsideration 95Provisions pending determination of appeal 96Court may order proceedings to be heard in private 97Appeal to Court of Appeal in certain cases

Part 7:
Miscellaneous provisions

Powers relating to evidence

98Commission may require person to supply information or documents or give evidence 98APower to search 98BPowers conferred by warrant 98CWarrant to be produced 98DOther duties of person who executes a warrant 98EDuty to assist 98FPower to inspect and take copies of documents, etc 98GCommission may exercise powers notwithstanding other proceedings 98HSupply of information and documents in relation to section 36A 99Powers of Commission to take evidence

Power to share information and documents with public service agencies, statutory entities, Reserve Bank, and New Zealand Police

99AASharing of information and documents with public service agencies, statutory entities, Reserve Bank, and New Zealand Police 99ABCommission may impose conditions on provision of information or documents

Assistance to overseas regulators

99ACommission may receive information and documents on behalf of Australian Competition and Consumer Commission 99BPurpose of sections 99C to 99P (which relate to assistance to overseas regulators)99CDefinitions of terms used in sections 99B to 99P 99DRestrictions on providing compulsorily acquired information and investigative assistance 99EGovernment-to-government co-operation arrangements 99FRegulator-to-regulator co-operation arrangements 99GContent of co-operation arrangements 99HProcedures relating to co-operation arrangements 99IProviding compulsorily acquired information and investigative assistance 99JConditions on providing compulsorily acquired information and investigative assistance 99KNotice to persons affected by provision of information 99LReporting on use of co-operation arrangements 99MSharing of non-compulsorily acquired information not affected 99NInformation provided by consent 99OPart 4 information not to be provided 99PMaintenance of privilege

Offences, regulations, and administrative provisions

100Powers of Commission to prohibit disclosure of information, documents, and evidence 100ACommission may state case for opinion of High Court 101Notices 102Service of notices 103Offences 104Determinations of Commission 105Restriction on delegation 106Proceedings privileged 106AJudicial notice 107Cartel prosecutors panel 107Annual report 108Regulations 109Commission may prescribe forms 110Repeals, revocations, savings, and consequential amendments 111Transitional provisions in respect of certain contracts, arrangements, or understandings 112Transitional provisions in respect of goods and services subject to price control under Commerce Act 1975 113Transitional provisions in respect of goods and services subject to price restraint under regulations made under Commerce Act 1975 114Transitional provisions in respect of milk pricing 115Savings in respect of certain provisions of Commerce Act 1975 116Winding up of Commerce Commission established under Commerce Act 1975 117Members of Commerce Commission established under Commerce Act 1975 deemed to be members of Commission 118Lay members of High Court appointed pursuant to Commerce Act 1975 deemed to be lay members of High Court appointed under this Act

Schedule 1AA:
Transitional, savings, and related provisions

Schedule 1:
Classes of merger or takeover proposals requiring prior clearance or authorisation by the Commission

Schedule 2:
Enactments amended

Schedule 3:
Enactments repealed

Schedule 4:
Orders and notices revoked

Schedule 5:
Material incorporated by reference

Schedule 6:
Exemptions from Part 4 in respect of specific pipelines

Schedule 7:
Additional matters relating to regulation of water services

Commerce Act 1986

Restrictive trade practices - Practices substantially lessening competition conditional upon authorisation

35: Contracts or covenants subject to authorisation not prohibited under certain conditions

You could also call this:

"Some agreements are allowed if they follow special rules"

If you look at a part of the Commerce Act 1986, you will see that section 35 is about contracts or covenants that need authorisation. You should know that this section was repealed, which means it is no longer part of the law. This change happened on 26 May 2001, when the Commerce Amendment Act 2001 came into effect, and you can find more information about this change in section 8 of that act.

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This page was last updated on 31 August 2025

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM88277.

Topics:

Business > Fair tradingMoney and consumer rights > Consumer protection

34: Certain provisions of covenants with respect to prices deemed to substantially lessen competition, or

"Rules to stop businesses cheating on prices to unfairly beat others"

36: Misuse of market power, or

"Don't use your market power to stop others from competing with you fairly."

Part 2Restrictive trade practices
Practices substantially lessening competition conditional upon authorisation

35Contracts or covenants subject to authorisation not prohibited under certain conditions (Repealed)

Notes

Section 35: repealed, on 26 May 2001, by section 8 of the Commerce Amendment Act 2001 (2001 No 32).