Penk ChrisCOMMERCE AMENDMENT BILLThird ReadingDebate resumed from 17 March.ASSISTANT SPEAKER (Hon Jacqui Dean): When last we considered this bill—the National Party has the call.CHRIS PENK (National—Kaipara ki Mahurangi): Thank you very much Madam Speaker. It's a pleasure to take a call on the Commerce Amendment Bill. It's one that I've not had a particular history with so it's with fresh eyes and great enthusiasm therefore that I get to join the debate at this the third and final reading. In doing so I've taken note of other comments that speakers before me have made at various stages of the bill and acknowledge too the legislative statement that's been put forward by the relevant Minister who joins us in the House now. I acknowledge the work that he's done that others throughout the process have done including the select committee the EDSI or the Economic Development Science and Innovation Committee—the very well-known body that I've just had to remind myself of its name. Of course it's so well-known as to be referred to usually simply by that acronym. Of course they've done some serious work some serious consideration of the bill on the way through and those comments have largely been reflected in the second reading so I don't intend to rehearse those except perhaps to touch on them in passing.But I did want to speak about the fact that there are four main areas in which the bill is going to bring change in the area of commerce and more specifically the area of competition and anti-competition law. The way that it mostly does that is by first strengthening the Commerce Act's prohibition against the misuse of market power; second repealing safe harbours in the Act; third by allowing a balance to be conducted between the public interest on the one hand and situations that would otherwise be considered contravention of the Part 2 of the main Act or the Act as it currently exists; and then sort of various miscellaneous changes.So to go through each of those four areas in turn the first I think is actually really interesting because that's clause 14 the section 36 prohibition against the misuse of market power. There's a philosophical distinction I suppose oftentimes between the left and the right about the way that we ensure competition the way that we seek to decide how it is that different players in a marketplace can perform to the maximum potential because that's good for them and of course that's good for the consumer. That allows the market as a whole to function. But I think the good news is—and I do want to acknowledge it because it seems that the bill is attracting bipartisan support. I do want to acknowledge that we have at least in this matter a fundamental starting point that is the same which is to say that in a market such as the New Zealand economy let's say—roughly speaking just to simplify grossly—that we do believe that allowing competition is a mechanism for ensuring the best outcomes overall. We assume—again somewhat of a simplification but—the consumer's a rational beast and will make decisions in their best interests and so the way to ensure that the best possible outcomes occur in an efficient manner is to allow the most possible options in front of that consumer.So we let the market decide as best we can but we do at the same time acknowledge that there are barriers to entry in the market. And so we don't want to take an approach that's completely laissez-faire attractive as that may be to those of us on the right—for example the ACT and National parties. But we would say that there are distortions in the fact that the market exists with barriers to entry oftentimes so we want to acknowledge those and we want to prohibit the misuse of market power in a way that would distort the market reflecting some of the barriers to entry as I've said. And so it is that the Commerce Commission will be able to publish detailed guidelines within the 12-month period following the passing of the Act or rather it receiving its Royal assent. So with that period of time there is the opportunity not only for those guidelines to be made but also for the relevant key players to make adjustments in their own thinking their own behaviour if needed to avoid this misuse of market power in trans-Tasman markets.The second point is the repeal of safe harbours. As someone who's spent a bit of time in literal harbours in a previous life I had before coming to this House the idea of safe harbours is very attractive superficially and in the literal sense. The idea of repealing safe harbours is worrisome to a former sailor. But actually of course we're talking in a figurative sense of areas in which those who might seek to exercise intellectual property rights could take refuge from scrutiny under competition law. So the bill is really I think taking quite a sophisticated approach. It's a modern approach that says actually while it might be counterintuitive we are enhancing and protecting the idea of competition by allowing those who own intellectual property to have rights to exercise in that space. And the reason that's counterintuitive is because of course it would be possible to argue that if there are property rights and intellectual property that are held by one entity that precludes others from joining in and using and developing those. But of course there's incentives and the mechanisms that we want the market to employ which is to say that there is profit both in that economic sense but also again more generally to be gained to be obtained by entities developing intellectual property. It's a valuable thing. It's worth investing in. It's worth investing time energy and capital.And so by preventing the erosion of those intellectual property rights we're actually saying that overall in time society the economy the market the community will be better off for that. Again a 12-month transition period applies according to the bill and the select committee's commentary and indeed the legislative statement which I've already acknowledged states that the reason for this is to allow those who will be affected by the repeal to come to agreement to make adjustments that are necessary and so forth. And it's expected that the Commerce Commission which is of course our public body that monitors such things—and indeed it does more than merely monitor; it actually actively intervenes at times—just at the risk of going into the next area that I wanted to talk to the idea there is that they'll be able to produce or amend existing guidelines so that interested parties can understand the effect of the repeals and adjust themselves accordingly.The third then was to allow on an interim basis restrictive trade practices to take place notwithstanding that they are restrictive. And the rationale for that is that the Commerce Commission is to be empowered to allow practices that would otherwise be prohibited to be allowed if they assess it to be within the public interest. Now there's an application of judgment—I suppose to some extent it's subjective but one would hope that it would be exercised in a way that is reasonable. And so I suppose the Parliament is saying really to the Commerce Commission and all those who are affected by its exercise of power that the principle involved is that if it's in the public interest overall to allow for a certain period of time the application of or conduct that would otherwise be anti-competitive then that would be allowed within terms defined and determined by the commission.I understand that the commission has already published guidelines setting out its approach to these decisions—and that's important—in a way that promotes at least some measure of accountability and allows some measure of certainty. So even though we might not be able to predict in any individual case with 100 percent certainty how the Commerce Commission would land so to speak on any given decision in the space we can say at least that if we understand the factors in those guidelines as to how it would make those decisions then there is a measure of predictability. And so the Commerce Commission has that power entrenched they say and confirmed and clarified. So I'll state for the record in this the third reading that the National Party agrees with the bill overall but also understands and acknowledges the purpose of that at least as an interim power where it is appropriate.The final category of changes that are being made—there are a number of different ones within that but one is for example allowing the authority in black and white for the Commerce Commission to exchange information with other Government agencies and regulators including New Zealand Police. And the reason for that is of course we want them to be able to fulfil the duties and the functions that we as a Parliament and the executive Government and society expect and hope that it will fulfil. Of course there's always a question about privacy rights so it seems that it's appropriate that there are safeguards relating to the use and storage of that information. We hope that those will be taken seriously and that power exercised very carefully because of course the privacy of information—it's not only individuals but other entities who have the right to that privacy and that right should be respected.So in conclusion the National Party continues to support the legislation and congratulate those involved in its passage.