Competition Law Or Competition Between Special Interest Groups? The Accountability Deficit In The Commerce Commission’s Market Study Power

Abstract

The Commerce Commission’s Market Study into the Retail Grocery Sector was widely criticised by the media for recanting on its bold draft report recommendations to stimulate competition in New Zealand’s duopoly grocery marketplace. This paper demonstrates that the market study power represents a broad departure from the Commission’s competition and fair trading functions and brings them into the policymaking arena, despite objections about their democratic legitimacy to assume these functions. Using the Retail Grocery Market Study as an example, this paper shows that the market study process favours organised industry groups at the expense of disparate consumer groups. This demonstrates that something is missing in how the Commission is held accountable for the exercise of the market study power. Applying Mark Bovens’ accountability framework, this paper argues that the market study process is insufficient from the democratic perspective by failing to equally represent consumer groups affected by the exercise of this power.