Resigning from the ARA, Mr Collinge becameChairman of the Commerce Commission from 1984 to 1989 -appointed by Minister Hugh Templeton for his business, commercial law and policy qualifications and as an agent for change [pages 57, 58]. With the purpose of removing business decisions and commercial issues from politicians, the Commission was at the commencement of his term revamped and given ‘wider powers’, including inquiry and review of mergers and takeovers and business practices [page 57]. Writing his congratulations to Mr Collinge on his appointment, the Rt Hon Sir Alexander Turner describes the new role as ‘a formidable task’ [page 60]. This increased further, two years later in 1986, when the Commerce Commission was further enlarged to combine the functions in the UK of the Monopolies Commission, the Restrictive Practices Court and the Office of Fair Trading [page 96].
(a)Overseeing De-regulation:This was the period in which competition and fair trading became the new framework for business in substitution for the previous wide ranging and intensive regulation. The focus of the Commission (which had previouslybeen described as ‘a latterday prices authority’ [page 57]) changed from largely a price control function to one with the primary emphasis upon promoting and protecting competition in the new deregulated environment [eg page 81]. As was said by the business press, Mr Collinge ‘oversaw deregulation’ [at pages 80-81].
In practical effect, with deregulation and the removal of border restrictions, it meant that many markets now had sufficiently low barriers of entry to allow competition to develop both from New Zealand and overseas so that most mergers and take-overs did not raise competition concerns. Intervention was therefore ‘moderate and cautious’ and occurred only when strong and demonstrable reasons for doing so were apparent [eg pages 69, 74]. The principles and approach established by Mr Collinge [eg page 62] were a basis for its ‘light handed regulatory oversight’.
(b)Contribution to Legislation:In 1984, the promotion of competition was but one of ‘eight effects’ in the Act to be considered in relation to mergers and takeovers and restrictive trade practices [page 92]. However, Mr Collinge advocated that one of the eight effects ‘the promotion ofcompetition’ would have primacy, and his first act as Chairman was to obtain approval of the Minister and the Commission that this was to be ‘the primary objective of the Act’ [pages 62, 81, 93]. He then developed techniques to apply the principle which were subsequently written into the Commerce Act 1986 [eg page 95]. In fact, the preamble of the 1986 Act states that it is singularly ‘an Act to promote competition in markets in NZ’, this being the first serious attempt in New Zealand to regulate competition [pages 76, 95]. Mr Collinge is correctly described by commentators as ‘the prime mover’ in these changes [at page 84] and in subsequent refinements [pages 77, 102].
(c)Developing the Principles: In 1986, the Commerce Act also introduced a modified antitrust model based on equivalent Australian legislation instead of the previous ‘case by case’ methodology [page 93] and the Fair Trading Act 1986 was also enacted. While the Commerce and Fair Trading Acts laid down broad principles (such as ‘substantial lessening of competition’, ‘dominance’, ‘public benefit’ and ‘misleading conduct’) it was still necessary to interpret what these meant in relation to the often technical and complicated areas of mergers and takeovers, restrictive trade practices and business conduct [see eg pages 68, 71-73, 98-99]. Alone among Commissioners and staff, Mr Collinge had had experience of the new approach and role. Some idea of his enormous contribution to the principles and procedures are set out in a Chapter published later by the Commission in ‘The Coming of Age of Competition Law in NZ’ (1996) which reviews the 1984-89 period in the context of the times [pages 87 -106]. As the Chapter shows, he laid the foundations of present competition and fair trading law and practice and, as with his efforts in the electricity sector, Mr Collinge was unquestionably the driving force.
(c)Developing the Principles: In 1986, the Commerce Act also introduced a modified antitrust model based on equivalent Australian legislation instead of the previous ‘case by case’ methodology [page 93] and the Fair Trading Act 1986 was also enacted. While the Commerce and Fair Trading Acts laid down broad principles (such as ‘substantial lessening of competition’, ‘dominance’, ‘public benefit’ and ‘misleading conduct’) it was still necessary to interpret what these meant in relation to the often technical and complicated areas of mergers and takeovers, restrictive trade practices and business conduct [see eg pages 68, 71-73, 98-99]. Alone among Commissioners and staff, Mr Collinge had had experience of the new approach and role. Some idea of his enormous contribution to the principles and procedures are set out in a Chapter published later by the Commission in ‘The Coming of Age of Competition Law in NZ’ (1996) which reviews the 1984-89 period in the context of the times [pages 87 -106]. As the Chapter shows, he laid the foundations of present competition and fair trading law and practice and, as with his efforts in the electricity sector, Mr Collinge was unquestionably the driving force.
(d)Keeping Cool in the Hothouse: The change from intensive regulation to competition and also the advent of Closer Economic Relations with Australia (ANZCERTA) in 1983 resulted in a need for companies to restructure in the light of the new commercial environment. There was also the sharemarket boom and bust of the mid 1980’s. At this time of high commercial activity, the broad terms of the legislation created considerable uncertainty and there were concerted attempts by those affected (eg including by the Round Table) in opposition [pages 69, 70, 81]. In response, the Commission published many guidelines to reduce the uncertainty, introduced ‘letters of comfort’, ‘advance clearances’, ‘information exchange’ and ‘draft determinations’, and often refrained from immediate prosecution in this formative period while the changes bedded down [eg at page 80]. A leading article in the Dominion by Fran O’Sullivan describes Mr Collinge as ‘keeping cool in the hothouse’ [pages 78-79].
(e)Change to Business Attitudes:There was at the time an urgent and necessary need for a changing attitude in the business community -from a ‘clubbish’ environment (often achieved through trade associations) where many business practices in each industry were uniform or markedly similar. In line with a direction in the Act, Mr Collinge promoted competition and a competitive environment by a multitude of speaking engagements and papers [eg pages 94,278-279]. By the end of his term, the climate and practice had changed perceptibly from the collusive inter-related nature of business to an increased awareness of the value of competition and a greatly enhanced competitive environment [eg see examples atpages 75, 77].
(f)Misleading Conduct in Business: A similar educative approach was taken by Mr Collinge on the introduction of the Fair Trading Act 1986 which oversees misleading conduct in business and integrity in business dealings (eg ‘tell the truth theCommission warns’) [see page 110]. He had already predicted reform and the emergence locally of ‘consumerism’ in his book ‘The Law of Marketing in Australia and New Zealand’ (first published in 1971) described by the Australian Financial Review as ‘the basis for a Ralph Nader’ [page 259]. Accordingly, Mr Collinge was perfectly placed to administer the Act and took many steps across a wide range of activity to ensure that traders were aware that many previous business practices and promotions now infringed the Act [eg pages 107-115]. His efforts were warmly received by Margaret Shields the Minister responsible for its introduction and contributed to the significant impact of the Act. Business conduct and practice changed markedly as a result [eg pages 107, 114, 115].
(g)Raising the Status of the Commission: During this time, the status and recognition of the Commission was upgraded to the standard of its overseas equivalents with whom there was close association and co-operation (particularly with Sir GordonBorrie (as he then was) in the UK, and in Australia. Mr Collinge’s Australian counterpart, Robert McComas, Chairman of the Trade Practices Commission, wrotewarmly of their association –in which he records ‘the pleasure I have had in dealing with you’ and that it ‘provided a marvellous opportunity to work with you on matters of mutual concern, certainly to my advantage...May I congratulate you on your achievements’ [page 117].
At the outset of his appointment Mr Collinge clearly enunciated and promoted change to an emphasis upon competition and other objectives [pages 57, 62, 65], and proceeded to implement and achieve same. The Business Reporter of the Dominion records that less than half way through his term and prior to the Commerce and Fair Trading Acts of 1986, he had ‘already seen more action at the helm than most, if not all, Chairman before him’ [page75]. Upon conclusion of his term, in his final statement, Mr Collinge said of Sir Alexander Turner’s ‘formidable task’ that he believed that ‘he had shot the tiger which he had come, with the consent of the Government, to shoot’.
The Governments (both National and Labour) during this period were particularly fortunate in that Mr Collinge, being uniquely suited to the task and ‘eminently well equipped to administer the Act’ [page 84], was prepared to interrupt a successful legal practice and private sector activity (which included resigning directorships and selling shares) in order to play a formative part in and to guide and oversee these ground breaking changes. Business experience had been lacking in previous regimes with resultant criticism [pages 57, 91-92]. Given that the Commission’s role was to change business attitudes and conduct and to create new ground rules in promoting competition in lieu of regulation, it was essential for the Chairman in the new regime to have a business background as well as experience in the area and, importantly, to be accepted by the business community in the role [see eg pages 57, 61, 118]. The success of the Commission was an essential part of the success of deregulation.