Economic perspectives on collaborative activity clearance process

Project by Link Economics Group

antitrust law nz

Economic perspectives on the first clearance application for a collaborative activities exception to New Zealand’s cartel provisions, 2022

In 2022 Emma Ihaia was invited to present at the annual workshop of the Competition Law and Policy Institute of New Zealand (CLPINZ) to provide economic perspectives on the Commerce Commission’s decision to decline a collaborative activity clearance application by Anytime NZ Limited. Anytime NZ is the master franchise owned for Anytime Fitness, which is a global gym franchise. Anytime NZ proposed introducing a standardised pricing policy that would allow it to impose upper and lower limits on franchisees’ membership pricing. It applied for a collaborative activity clearance as the standardised pricing policy may be a cartel provision.

Emma’s presentation highlighted that the collaborative activity criteria in the Commerce Act have led to an outcome where collaborative activity that does not appear likely to result in a substantial lessening of competition is not awarded with a clearance. She discussed the criteria for collaborative activity clearances, the difficulties in satisfying those tests, and the benchmark for assessing whether the collaborative activity is “reasonably necessary.” Her presentation highlighted that the precedent provided by the Commission’s decision on Anytime NZ’s application may result in the clearance mechanism being relevant to only a small subset of circumstances and could inadvertently discourage franchise arrangements.

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