ComCom chairman Mark Berry will hand over reins as watchdog's power grows
Thursday, 15 November 2018
ANALYSIS The search has started for a new chairman of the Commerce Commission.
Current chairman Mark Berry will step down in May, after 10 years at the helm of the competition and consumer watchdog, a spokeswoman for Commerce and Consumer Minister Kris Faafoi has confirmed.
'By serving in this demanding role for two terms Dr Berry has made a considerable contribution.
'Once the interviews are complete, the minister will consider candidates and consult with government colleagues before making a final recommendation to the Governor-General,' she said.
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A commission spokesman confirmed Berry had not applied for what would have been a third five-year term.
The new competition champion will be able to use a fresh new super power granted to the commission last month to complete 'market studies' into problem sectors.
A law change enables the Commerce Commission to assess whether markets are working effectively, and compels businesses to provide information.
He or she should also benefit from another law change criminalising cartels.
It is difficult to find a yardstick to measure the performance of the watchdog and its commissioners.
The Commerce Commission prosecutes breaches of the Fair Trading Act and the Commerce Act, pinging the likes of mobile traders and errant telcos – fish in a barrel mostly.
It also regulates many utilities, undertaking important but dull tasks such as deciding the fair rate of return that the likes of electricity lines companies and airports should be able to earn.
Sometimes the commission's decisions are challenged in the courts, where it often has the upper hand thanks to its near bottomless legal resources and the tendency for the courts to defer heavily to the commission as an 'expert body'.
The commission's win/loss ratio at court during Berry's tenure has reflected that advantage, but isn't totally without blemish.
A year ago, the High Court rejected the commission's case that two real estate businesses had acted unfairly in a stoush with Trade Me over property listings. Inevitably, the commission decided to appeal.
Awkwardly, the High Court decision came after several other Hamilton real estate companies involved in similar a dispute had bowed before the commission's legal prowess and agreed to pay millions of dollars in penalties.
The commission also has the job of clearing or authorising major takeovers, which is where most controversies arise.
Berry may be best remembered at the commission for declining to clear the takeover of Sky TV by Vodafone, or to authorise the merger of NZME and Stuff Ltd.
Both decisions are looking somewhat suspect with the benefit of hindsight and it would be interesting to see what would happen now if either application was re-submitted.
Spark's full-on assault on Sky Sport has made Sky's grip on sport rights look much less unassailable than when the commission rejected the Vodafone/Sky takeover in 2016.
But the aggression with which Spark has driven into sports would have been tough to predict, so it would perhaps be unfair to argue Berry or the commission got the ruling wrong.
One competition lawyer suggests Spark's push into sports might not have been possible if Sky had merged with Vodafone to become a business with deeper pockets.
In declining the NZME/Stuff merger, the commission – at least initially – appeared to significantly underestimate the challenges facing the New Zealand media industry.
The commission's Australia equivalent, the ACCC, this month approved the takeover of Stuff-owner Fairfax Media by Nine Entertainment.
That was despite acknowledging the takeover would reduce the number of companies intensely focusing on Australian news from five to four.
Unlike the Commerce Commission, ACCC chairman Rod Sims strongly emphasised the low barriers to entry in online news and competition from new players such as The Guardian, The New Daily, Buzzfeed, Crikey and The Daily Mail in reaching his decision.
But the New Zealand and Australian situations are not identical.
In the absence of strong media laws in New Zealand that could have limited ownership stakes in the combined NZME/Stuff business, the commission's desire to avoid further media concentration here was at least understandable.
Ultimately, it is not the commission's job to come up with solutions for troubled industries. It has the simpler task of sitting in judgment on the solutions put forward by others.
A more thorny topic is whether the public would feel the overall competitive landscape in New Zealand has improved since Berry took charge in 2009.
The commission has carved very deep grooves in areas such as telecommunications regulation where it wields special powers and built specialist teams.
Occasionally, its interest in those industries has seemed to border on the obsessive.
In 2016, it warned internet providers about using the term 'gigabit broadband' in their marketing on the basis that they could only deliver a peak speed just shy of that, at about 950 megabits per second.
Meanwhile, continuing grizzles over petrol prices, bank profits, regional airfares, power prices and the workings of the supermarket duopoly, suggest that there hasn't been a strong feeling of forward momentum in competition outcomes more generally.
The new powers the commission will have to undertake 'market reviews', and the impending criminalisation of cartels, means it may be fair to judge the new Commerce Commission chairman by a tougher yardstick than would be reasonable today.
A leading competition lawyer notes the commission can only protect competition, rather than create it.
But – with their new powers – it has got to be hoped that the next chairman will leave Kiwis feeling they work and spend in economy that is perceptibly fairer and more competitive when their first term expires in 2024, than it is today.