KEY POINTS:
Commerce Minister Simon Power has hinted at changes to the competition watchdog Commerce Commission amid big business calls for a crackdown.
Some firms are pressing the government to change its powers or unseat chairman Paula Rebstock whose term ends soon, according to a well-placed legal source.
Simon Power referred yesterday to a report by a prominent competition lawyer Grant David of Telecom's law firm Chapman Tripp who called for radical reform.
Power said yesterday he was "casting a fresh eye" on the Commission.
The commission - which decides issues like competition and which last has prevented sale of The Warehouse Group - also clashed last year with
big firms Telecom and Air New Zealand.
The lines company Vector is believed to have raised concerns in the past, but chairman Michael Stiassny said yesterday that a small
country like New Zealand needed a regulator like the Commission.
David - who said he wrote the article in a private capacity and without talking to Telecom - called for a "full review and disbanding the Commission.
Telecom chief executive Paul Reynolds - who has complained strongly about the Commission - denied Telecom is lobbying for change.
David said competition law may be a luxury that New Zealand could not afford and it may be a time for drastic change.
Three other competition lawyers approached by the Herald acknowledged tension between the Commission and business, and there was a case for changes.
One warned of dangers coinciding with the election of a new business friendly government.
"We have to extremely concerned that vested interests are seizing the political advantage and that personalities are playing a part in that," said the lawyer, who would not be named.
He said that a weak Commission would provide an advantage to dominant players in markets. The lawyer said that corporate criticism of
the Commission fell into two groups, with some calling for changes to the institution. But the push was more focussed on having Rebstock replaced.
Commission chief executive Nick Hill said that in tough economic times some businesses cry for a loosening of regulations.
"But it is also true that in tough economic times some businesses will resort to illegal tactics such as price-fixing and collusion not to compete, in order to try to keep afloat.
"In these times more than ever, it is important for the New Zealand economy that the Commission remains strong, independent and
focussed on delivering efficient competitive markets.
"It is interesting to note that most other major economies are moving to strengthen competition law and enforcement as part of the solution to the current world economic problems."
Andrew Matthew, a competition lawyer with Minter Ellison Rudd Watts said that the Commission and resourced and did a world class job but questioned priorities.
Bell Gully head of competition law Phil Taylor said that David had a valid view but that regulators like the commission were a normal part of economies.
David's view was "naive".
One source said that the Commission challenging the sale of the Warehouse to Woolworths Australia or Foodstuffs had annoyed many in business.
Last year when the Commerce Commission challenged Air New Zealand over alleged anti competitive activity for freight , the airline made a blistering attack. It was "clearly an approach designed to justify their existence and seems more about grandstanding than about getting to the bottom of the allegations and facilitating a co- operative approach from the airlines."
