Plain language law

New Zealand law explained for everyone

Commerce Act 1986

Business acquisitions

47: Certain acquisitions prohibited

You could also call this:

"You can't buy a business if it would make the market less competitive."

Illustration for Commerce Act 1986

You cannot buy assets of a business or shares if it would make competition in a market much weaker. If you do something that would make competition weaker, you are breaking the law. You can be considered one person with others if you are connected or work together.

When the law talks about a person, it can mean one person or a group of people who work together or own parts of each other's businesses. You are considered to be working with another person if you can control what they do, even if it is not directly. You can control what another person does if you have a lot of influence over their business.

You do not control another person just because you sell them things or compete with them in the same market. This law is part of the Commerce Act 1986, which was changed by the Commerce Amendment Act 2001. You must follow this law when you are thinking about buying assets of a business or shares.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM88421.

Topics:
Business > Fair tradingMoney and consumer rights > Consumer protection
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46: Saving in respect of business acquisitions, or

"This law doesn't apply when buying or selling a whole business or its shares."

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47A: Declaration relating to acquisition by overseas person, or

"When someone from overseas buys a New Zealand company, a court can make a special statement if it affects competition."

Part 3Business acquisitions

47Certain acquisitions prohibited

  1. A person must not acquire assets of a business or shares if the acquisition would have, or would be likely to have, the effect of substantially lessening competition in a market.

  2. For the purposes of this section, a reference to a person includes 2 or more persons that are interconnected or associated.

  3. For the purposes of this section, a person is associated with another person if that person is able, whether directly or indirectly, to exert a substantial degree of influence over the activities of the other.

  4. A person is not able to exert a substantial degree of influence over the activities of another person for the purposes of subsection (3) by reason only of the fact that—

  5. those persons are in competition in the same market; or
    1. one of them supplies goods or services to the other.

      Notes
      • Section 47: substituted, on , by section 11(1) of the Commerce Amendment Act 2001 (2001 No 32).