The Commerce Commission (Commission) has updated its Investigation Guidelines (Guidelines) for the first time in almost a decade. It did not issue any media, which is slightly surprising because the guidelines mark a shift in approach for what is published on its investigation case registers, and provides the most complete guidance to date on when it will share information with other public bodies under section 99AA of the Commerce Act 1986 (Act).
Executive Summary
For the time poor:
- The scope of the Guidelines has been expanded to cover investigations under all statutes that the Commission enforces, including under the Grocery Industry Competition Act 2023 (GICA) and the Telecommunications Act 2001. This should lead to more consistency across Commission investigations;
- The Commission is moving to publish more details about investigations – including the names of investigated parties – earlier in investigations. This marks a change of approach, especially for restrictive trade practices investigations; and
- There is new guidance on when the Commission will share information with other Government agencies and regulators under section 99AA of the Commerce Act. However, the Guidelines are silent on whether it will consult with, or even inform, parties where their information is being shared. This has implications for all information held by the Commission, not just what it gathers in investigations.
What are the Investigation Guidelines?
As the name suggests, the Guidelines set out how the Commission investigates under various statutes that it enforces, including:
- How it gathers information (through information requests, interviews and searches);
- How it uses the information it has gathered, including for purposes other than the investigation at hand;
- How it protects the information it has gathered;
- How, what and when it communicates about investigations (including publicly); and
- How it makes decisions.
The Guidelines sit alongside the Commission’s Enforcement Priorities, Enforcement Response Guidelines and Enforcement Priorities as key documents that inform how the Commission conducts investigations and makes enforcement decisions.
Key updates
The Guidelines have been updated with the new Commission livery, to take into account certain legislative changes, and to reflect how the Commission is actually operating. While many of the changes are minor or cosmetic, several are significant.
Expanded scope of the Guidelines
The Guidelines have been expanded to cover investigations under each of the statutes that the Commission enforces. Whereas previously the Guidelines only covered Parts 2 and 3 of the Commerce Act (restrictive trade practices and non-notified mergers), the Fair Trading Act and Credit Contracts and Consumer Finance Act 2003 (CCCFA), they now cover those statutes plus:
- the rest of the Commerce Act;
- the GICA;
- the Telecommunications Act;
- the Dairy Industry Restructuring Act 2001;
- the Fuel Industry Act 2020; and
- the Retail Payment Systems Act 2022.
This is a common-sense move and should hopefully promote more consistent and predictable processes and decision-making across the Commission, although I expect there will still be some minor variations between the approaches of the different teams, to take into account nuances in the different legislative regimes.
The Commission plans to publish more details about ongoing investigations
The Commission’s case register shows high-level information about its investigations and their status (ongoing, in litigation or completed). While the Commission has been publishing investigated parties’ names for some time in eg the Fair Trading Act space, it has tended to do it less in other areas eg restrictive trade practices investigations under Part 2 of the Commerce Act.
Previously the 2018 guidelines stated (at [272]) that:
“where an investigation – including whether we are investigating – is a matter of considerable public interest we may publish information about what we are investigating.”
This has now changed to include a new and punchy statement near the start of the Guidelines (at [26]):
“Where appropriate, we will report who we are investigating on our website”
followed by a more qualified statement later on (at [257]):
“When we open an investigation, we will generally publish some information about it on our case register. At this stage, the information is likely to include the provision(s) of the Act under consideration, and may include the name of the investigated party/parties, and/or the industry they are in.”
So, when does the Commission think it will be “appropriate” to publish the names of investigated parties? The Guidelines set up a 2-stage test. The Commission will now apply the following criteria to civil and criminal investigations when “considering” whether to public an investigated party’s name.
For civil investigations, the Commission will consider publishing a party’s name unless the party is:
- an individual; and/or
- there is a need to preserve evidence or otherwise protect the integrity of the investigation.
For criminal investigations, the Commission consider publishing if:
- there is a risk to public safety;
- the matter is already public; and/or
- the conduct has been self-reported.
So, there seems to be a presumption for publication in civil cases but against publication in criminal cases.
However – and importantly – in both civil and criminal investigations the Commission will continue to apply the principles of the Official Information Act (OIA), and have regard to the Solicitor-General’s Prosecution Guidelines, when deciding what information to publicly release. This means that, for example, the oft-cited section 9(2)(b)(ii) of the OIA will still need to be considered – whether publication would be likely unreasonably to cause prejudice the commercial position of a person, and that is not outweighed by public interest grounds.
Investigated parties’ names have often been withheld on commercial prejudice grounds in the past but, while the Commission has not indicated a shift in how it interprets the OIA, I expect arguments on section 9(2)(b)(ii) grounds may come under greater scrutiny in future.
Updated guidance on how the Commission shares (confidential) information
Since the Guidelines were last updated in 2018, the information-sharing provisions in section 99AA of the Commerce Act have come into force (in 2022). Under section 99AA, the Commission is permitted to share information and documents with a public service agency, a statutory entity, the Reserve Bank of New Zealand, or the New Zealand Police where the Commission considers this may assist these entities in the performance or exercise of their functions, powers or duties.
Before providing any information or documents, however, the Commission must be satisfied that:
- doing so will not substantially affect the performance of its other functions; and
- appropriate protections are or will be in place for the purpose of maintaining the confidentiality of anything provided (in particular, information that is personal information within the meaning of the Privacy Act 2020).
This gives the Commission significant latitude to proactively (or reactively) share information with a wide range of public bodies, but the Commission has not, to date, put out standalone guidance on how it will share information under this provision.
The Guidelines now provide the most complete guidance on the subject, including some useful examples (at [247]) of where the Commission will share information with other agencies, such as:
- where concerns are raised under a law that another enforcement agency enforces;
- to determine the appropriate enforcement agency to conduct an investigation;
- investigations conducted in cooperation with another agency;
- where there is a suggestion of serious criminal offending in New Zealand that falls outside the Commission’s responsibilities; or
- where there is a serious threat to public health or public safety.
While the Commission says it will inform the receiving entity about whether information was compulsorily acquired or is confidential, it is silent on whether it will consult (or inform) parties whose information is being, or has been, shared. This is a notable omission, and suggests the possibility that parties may not be told when their confidential information is being shared with other entities. The Guidelines are also silent on how the Commission will satisfy itself that there will be appropriate measures in place to protect information that is shared.
If the Commission considers there may be circumstances where it is not appropriate to inform a person, or inform them straight away, that their confidential information is being shared, then this should be the subject of guidance. Similarly, guidance should be issued on how the Commission will ensure the receiving entity protects a third party’s confidential information. Given the recent concerns that have been raised about the Commission’s ability to protect confidential information, it is curious that the Commission has chosen not to address these issues head-on.
Those participating in Commission investigations (or any Commission processes, for that matter) should be cognisant of this information gateway when dealing with the Commission.
