The Purpose of Substantially Lessening Competition: The Divergence of New Zealand and Australian Law

Abstract

Section 27 of New Zealand’s Commerce Act is based on section 45 of Australia’s Consumer and Competition Act. Both sections proscribe (inter alia) contracts, arrangements and understandings that have the purpose of substantially lessening competition. New Zealand courts initially emphasised that the two countries’ law should be the same. However, with the purpose of substantially lessening competition New Zealand and Australia’s law has diverged. This is in two main areas. First, whether purpose is objective, subjective or both are relevant. Second, whether the purpose limb can be satisfied if achieving an anticompetitive effect is impossible. This article discusses the leading cases and argues the Australian law is preferable.

Keywords: competition law, substantial lessening of competition ,purpose

JEL Classification: K21