Faafoi KrisCOMMERCE AMENDMENT BILLSecond ReadingHon KRIS FAAFOI (Minister of Commerce and Consumer Affairs): I move That the Commerce Amendment Bill be now read a second time.The Commerce Amendment Bill amends the Commerce Act 1986 and deals with three important issues to enhance the operation of New Zealand's competition regime. These three issues are market studies or competition studies as they are referred to in the bill; secondly the regulation of specified airport services; and finally alternative enforcement mechanisms used by the Commerce Commission.The Commerce Amendment Bill was introduced into this House on 28 March this year and was referred to the Transport and Infrastructure Committee for consideration on 1 May 2018. The committee received 24 submissions from interested groups and individuals and heard oral evidence from 10 submitters. I wish to thank members of the committee for their consideration of this bill and in particular the chairperson Darroch Ball for ensuring that the bill was reported back in such a timely manner.The committee members have carefully considered a range of technical issues raised in submissions. It is unfortunate that the committee was not able to reach a consensus on all of these matters raised but by majority it has recommended some very useful amendments which will improve the operation of the bill. So I thank those members for their work.I will now briefly turn to some key issues in the bill as reported back. In terms of market studies the ability for the Commerce Commission to undertake market or competition studies is a key element of this bill. Market studies are in-depth studies into whether competition in a market is working effectively and if not why not. Unlike an enforcement investigation the Commerce Commission may look into the structure and performance of the market itself and if required make recommendations on how it could work better. The bill includes a non-exhaustive list of types of recommendation the commission may make. These market studies have the potential to identify opportunities for significantly improving market outcomes for consumers and businesses. Healthy competition in markets improves affordability of goods and services for consumers and promotes innovation and productivity for businesses.An important feature of this bill as introduced is that it provides that both the responsible Minister and the Commerce Commission can initiate a market study. I see the ability of the Commerce Commission to initiate a market study as being critical to maintaining the integrity of the regime. It enables the politics to be removed from the decision on which markets to study. This is particularly important if a Government is active in the relevant market either in a regulatory capacity or through its trading activities.The committee by majority has also recommended that the responsible Minister should have to publicly respond to a Commerce Commission final report on a market study and I welcome this change. The Government should be required to state its views on the commission's findings and what steps it proposes to take in response to any recommendations. It adds to Government transparency and the integrity of the regime.A further issue in the bill is measures to strengthen economic regulation of airports. The Commerce Commission currently has a programme of work under way to assess the latest price resets by the three major international airports. This bill does not directly affect that work. Rather it provides that in the event that the Commerce Commission identifies that the current information disclosure regime is not working effectively there is a statutory process for determining whether further regulation is desirable—that is it provides a regulatory backstop.The committee by majority has recommended minor changes to the bill. First the majority recommends making it clear that if an inquiry is initiated into whether further services provided by the three major airport companies should be regulated the Commerce Commission must consider the costs and benefits of imposing regulation on that service and market power of those airports. Secondly the majority recommends clarifying that a new airport company may become subject to regulation under the Commerce Act following a full inquiry by the Commerce Commission.I support these changes. The amendments in this bill will strengthen the regulatory regime to better protect users of airport services from misuse of market power by airport companies. These changes should impose no direct costs on the airport companies if they're operating consistently with the purposes of the current regime.Finally the bill amends the Commerce Act to also allow the Commerce Commission to accept enforceable undertakings to resolve enforcement cases. This mechanism is a cost-effective and timely means to stop anti-competitive conduct and if desirable remedy any harm to competition. The committee has recommended amendments to make clear the matters that may be included in an enforceable undertaking including when the Commerce Commission is investigating a potentially anti-competitive merger. These are very useful clarifications.In conclusion passing this bill will enhance New Zealand's competition regime and protect the well-being of consumers and businesses. I commend the Commerce Amendment Bill to the House.