We need a watchdog with teeth

Ordinary businesses that are not in positions of market dominance should go on high alert at Fran O’Sullivan’s column on the background to Paula Rebstock’s abrupt departure from the Commerce Commission. Even more so, at the suggestion of a push to get rid of the commission entirely.

The regulatory debate is sometimes characterised as between “the business sector” who don’t want regulation, and “the rest” who do. Nothing could be more wrong.

Targets of regulation are in many cases progeny of former government organisations that ran essential services such as telecommunications, energy and air travel. They inherited positions of invincibility which, in the absence of regulatory oversight, would have left them as perpetual monopolists at huge community cost.

Ernie Newman of TUANZ writes at the beginning of his opinion piece in today’s Herald. Newman believes we need a watchdog with teeth, not an emasculated poodle. Adam agrees wholeheartedly. Newman supports the stance taken by the Commerce Commission in recent times, as does Adam. Telecom for example indulged in anti-competitive behaviour for years. The proposed Air NZ/Quantas deal was another example of potentially anti-competitive behaviour. In addition, Adam suspects that the power generating industry may well be found in the forthcoming Wolak report to have been indulging in some anti-competitive behaviour as well.

Newman concludes his article:-

The Government may come to regret being influenced by a small, skewed group of disaffected stakeholders who enjoy a position of market privilege. It should think with enormous care, and consult far more widely, before weakening the commission any further.

Very much the conclusion of Adam’s post yesterday. See also Quotation for Today, Thursday 19 March.

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