Commerce Act 1986

What it is

The Commerce Act 1986 is the New Zealand statute that promotes competition in markets for the long-term benefit of consumers. It prohibits anti-competitive agreements, misuse of market power, and anti-competitive mergers, and it enables economic regulation of certain industries. It is enforced by the Commerce Commission, with the High Court as the primary venue for enforcement action.

For homeowners and the real estate industry, the Commerce Act has become relevant in two ways: (1) the prosecution of five major NZ real estate agencies (Barfoot & Thompson, Harcourts, LJ Hooker, Ray White, Bayleys) for price-fixing conduct in relation to TradeMe's listing fees, with judgment delivered 16 December 2016 and penalties totalling approximately $18 million — demonstrating that agency coordination on platform fees is actionable; and (2) the question of whether dominant listing platforms (TradeMe Property, realestate.co.nz) engage in conduct that misuses market power — a question highlighted by the 2026 Gupta v Rightmove class action in the UK.

What it covers

• Part 2 — Restrictive trade practices. Prohibitions on anti-competitive agreements, cartels, price-fixing, and exclusionary conduct.
• Section 30 — Prohibition on cartel conduct. Agreements between competitors to fix prices, restrict output, allocate markets, or rig bids.
• Section 36 — Taking advantage of market power. A business with substantial market power must not engage in conduct that has the purpose, effect, or likely effect of substantially lessening competition.
• Part 3 — Business acquisitions. Mergers that would substantially lessen competition require Commerce Commission clearance.
• Part 4 — Regulated industries. Economic regulation of gas, electricity, airports, telecommunications.
• Enforcement: for bodies corporate, pecuniary penalties up to the greater of $10 million, three times the commercial gain, or 10% of annual turnover; for individuals, up to $500,000, plus up to 7 years' imprisonment for criminal cartel conduct; private damages actions are also available (s.82).

What it gives you

• Protection from anti-competitive agreements among providers that would otherwise raise prices or reduce choice.
• A regulatory check on market-dominant firms. Where a single firm has substantial market power, section 36 constrains conduct that entrenches that power against competition.
• A public-enforcement backstop. The Commerce Commission investigates and prosecutes; consumers benefit indirectly even when they are not parties.
• A private-action pathway under section 82 for those who have suffered loss as a result of a contravention.

Key sections and how they work

Section 27 — Contracts, arrangements, or understandings substantially lessening competition

Section 27 prohibits agreements between competitors that have the purpose, effect, or likely effect of substantially lessening competition in a market. It is the general competition-law provision that applies alongside the specific cartel prohibitions.

Sections 30 and 30A — Cartel prohibition

Section 30 prohibits entering into, or giving effect to, a contract, arrangement, or understanding that contains a "cartel provision". Section 30A defines a "cartel provision" as one that has the purpose, effect, or likely effect of price-fixing, restricting output, allocating markets, or bid-rigging. Criminal liability for cartel conduct commenced on 8 April 2021. The Commerce Commission prosecuted five major NZ real estate agencies (Barfoot & Thompson, Harcourts, LJ Hooker, Ray White, Bayleys) under the pre-2021 provisions for coordinating a response to TradeMe's listing-fee model; the High Court judgment was delivered on 16 December 2016. The case confirmed that coordinated industry responses to platform fees can constitute cartel conduct.

Section 36 — Taking advantage of market power

Section 36 was substantially amended by the Commerce Amendment Act 2022. The current test is whether a business with substantial market power engages in conduct that has the purpose, effect, or likely effect of substantially lessening competition in a market.

This is the provision most relevant to questions about listing-platform dominance. If a platform with substantial market power imposes terms or fees that have the effect of lessening competition — for example, by making competitor listing platforms non-viable — section 36 provides a framework for challenge.

The UK's 2026 Gupta v Rightmove class action alleges abuse of dominance under UK law, with Rightmove holding approximately 80% of UK portal time. The NZ analogue — TradeMe Property holding a comparable share of NZ listing attention — has not been the subject of a published section 36 investigation at time of writing.

Section 82 — Private damages actions

Any person who has suffered loss as a result of a contravention of the Act can seek damages from the contravening party under section 82. This is the provision that would support a private action against anti-competitive listing-platform conduct.

Part 3 — Business acquisitions

Acquisitions that would substantially lessen competition require Commerce Commission clearance. The Commerce Commission cleared TradeMe's 2021 acquisition of PropertyNZ / homes.co.nz on the basis that homes.co.nz was unlikely to become a significant listings competitor. Critics have argued that this clearance entrenched the TradeMe + realestate.co.nz duopoly; the clearance itself is not open to retrospective review, but the market structure remains relevant to section 36 assessment.

How the Act has applied to the NZ real estate industry

Commerce Commission v Barfoot & Thompson Ltd & Ors (2016)

Between approximately 2013 and 2014, several large NZ real estate agencies coordinated a boycott of TradeMe Property's new per-listing fee model, preferring the prior flat-fee arrangement. The Commerce Commission investigated and prosecuted five agencies for price-fixing conduct under section 30.

The case resulted in substantial pecuniary penalties for the agencies involved and established that industry-wide coordination on platform fees — even where the industry participants argue they were jointly negotiating in good faith — can cross the line into prohibited cartel conduct. For the homeowner.org.nz strategic frame, the prosecution is direct evidence that NZ competition law reaches the real estate industry's coordination behaviour.

Listing-platform market structure

TradeMe Property and realestate.co.nz (the latter co-owned by REINZ) together account for the overwhelming majority of NZ residential property listing attention. This structure raises section 36 questions about conduct that entrenches the duopoly — for example, listing-fee pricing, access terms for competing platforms, or exclusive arrangements. To the extent these questions have been investigated, the Commerce Commission has not published recent findings.

A section 36 investigation would typically require complaints from affected parties (new entrant platforms, vendors, buyers) or Commerce Commission initiative. The UK Rightmove class action shows a model of private-plaintiff action under equivalent legislation.

Common misuses

"Competition law doesn't apply to professional services"

Commerce Act applies to all markets and all businesses operating in NZ, including professional services. Real estate is not exempt.

"The Commission already cleared the merger, so there can't be a problem"

A merger clearance addresses whether the specific transaction substantially lessened competition. It does not pre-clear future conduct by the merged entity. Post-merger conduct can still engage section 36.

"Vendor complaints about platform fees aren't competition law issues"

Where platform fees are argued to reflect market power rather than competitive pricing, the question is a competition-law question. Whether it reaches the threshold for section 36 depends on the facts.

When you might cite this Act

• Where industry-wide agency conduct appears coordinated in a way that affects you. Section 27 and section 30 apply.
• Where listing-platform dominance is producing supra-competitive fees or restrictive terms. Section 36 is the framework for analysis.
• Where you have suffered specific loss attributable to competition-law contraventions. Section 82 supports a private damages action.
• Where you want to raise a structural concern with the Commerce Commission. Complaints can be filed via comcom.govt.nz.

Related rules

• Fair Trading Act 1986 — enacted alongside the Commerce Act; covers misleading conduct where Commerce Act covers competition.
• Real Estate Agents Act 2008 — professional regulation of licensees; distinct from competition regulation but overlapping at the industry-conduct level.

Authoritative sources

• Full text: Commerce Act 1986 — legislation.govt.nz
• Commerce Commission: comcom.govt.nz — investigations, decisions, complaints.
• Case register (TradeMe / PropertyNZ clearance 2021): comcom.govt.nz

Our guides that use this Act

• Commission in NZ: how much, and what it buys — commission-structure analysis with reference to competition considerations.