Access to essential facilities under section 36 of the Commerce Act 1986: Lessons from Australian competition law

The adequacy of New Zealand's misuse of market power provision to regulate access to 'essential facilities' was investigated as part of the 1989 review of the Commerce Act 1986 (NZ). In a dramatically divergent outcome to that recommended by Australia's Hilmer Committee in 1993, New Zealand's Ministry of Commerce concluded that '[r]eliance on general competition law is the Government's favoured approach for guaranteeing access to essential facilities. 'It was made clear, however, that industry-specific regulation would be introduced to supplement the Commerce Act, if necessary. Accordingly, the denial of access to an essential facility in New Zealand -whether manifest from an outright denial or by offering to provide access on terms and conditions that are impractical or uneconomic - is commonly treated as a type of refusal to supply under s 36 Commerce Act. However, the notion that s 36 might incorporate an essential facilities doctrine based on that developed in the United States was specifically rejected by the New Zealand High Court in Union Shipping New Zealand v Port Nelson Ltd. In declining to import the doctrine into New Zealand competition law, the Court warned that a 'wrong turning at this point may prove painfully difficult to correct'. New Zealand essential facilities cases are required to be determined, therefore, strictly in accordance with the terms of s 36