Commerce Act reform ditched

The Commerce Commission will no longer develop guidelines for a section of the Commerce Act that aims to prevent companies with market power from abusing it in order to deter competition, the body said yesterday.

The commission initially put the development of the guidelines on hold until a decision had been reached on its 0867 case against telecommunications giant Telecom.

The commission lost its final appeal on September 1.

The case was the first time the Supreme Court considered and decided on the appropriate legal analysis under section 36 of the Commerce Act.

The Supreme Court unanimously rejected the commission's appeal over Telecom's introduction of the 0867 dial-up prefix in 1999.

Telecom imposed the prefix on competitors to stem its losses under existing contracts on dial-up internet calls.

Commission general counsel Peter Taylor said the law as it stood was affecting the body's ability to fulfil its role in enforcing section 36.

But the commission has backed down on reforming the law since it lost its last appeal.

The High Court and the Court of Appeal rejected the commission's claim that Telecom had abused its market power with the 0867 package.

The Supreme Court decision ruled that the introduction of the 0867 package followed an unanticipated and substantial expansion of residential internet dial-up usage.

The commission said developing guidelines would provide "limited value" and that it would continue to assess each case it investigates on its facts to determine whether to take the case to court under Sector 36.