2026 will see substantive changes to key provisions of the Commerce Act coupled with an ongoing focus on enforcement 'hot spots' such as the prohibition on unconscionable conduct.

Commerce Act shake-up

The Commerce Act changes set for mid-2026 are aimed at strengthening New Zealand's merger regime, addressing concentrated markets and predatory pricing, and streamlining Commerce Act processes and reduce uncertainty. The Commerce Amendment bill was introduced to Parliament in December 2025 and it is currently anticipated to be implemented mid-year.

The key amendments include:

• Clarifying the substantial lessening of competition (SLC) test: The SLC test will be clarified to include 'creating, strengthening, or entrenching a substantial degree of market power in a market'. This is intended to align New Zealand's merger laws to the Australian test for mergers, but will retain the existing test for unilateral conduct and multi-firm arrangements. A new principle-based merger clearance test will be introduced which also use the SLC test.
• Combating predatory pricing: A new objective economic-based test for predatory pricing will be introduced. Predatory pricing will be determined under a misuse of market power if, for a sustained period, it prices below Average Variable Cost (AVC) or Average Avoidable Cost (AAC) or if it prices above AVC or AAC but below long-run Average Incremental Cost or Average Total Cost if the pricing is for an exclusionary purpose. The Bill clarifies that short-term promotional pricing, and other short-term below-cost pricing, including one-off specials, de minimis discounts, or mistaken pricing are not predatory pricing unless they are part of a pattern of below-cost pricing behaviour over a sustained period. 
• Introducing corrective action orders: The court will have the power to make orders for corrective action where a person has breached the anti-competitive conduct prohibitions, including cartel and misuse or market power prohibitions, to avoid or mitigate the adverse effects of the breach or to ensure the breach is not continued or repeated. Only the Commerce Commission can apply for these orders, and they can include making goods, services or information available for supply, reflecting the terms of the orderin contracts, or acting in a non discriminatory manner. 
• Changes to the merger regime: Legal and procedural updates to the merger regime will also be implemented as well as expanded powers for the Commission.

Enforcement 'hotspot': The interface between unconscionable conduct and misuse of market power

Unconscionable conduct is one of only six Commerce Commission priorities for 2025/2026 and is expected to be in the spotlight this year. The Commission defines unconscionable conduct as business activity which is a substantial departure from New Zealand's generally accepted or expected standards of business conduct [1]. It has publicly signalled it is looking for a precedent setting case.

In particular, we expect investigations in circumstances where both unconscionable conduct and misuse of market power may be at issue – potentially giving the Commission two bites of the same apple. This approach mirrors recent Australian trends where the overlap between these prohibitions has been tested in litigation.

Australian developments: Lessons from Epic Games and Quantum Housing

In August 2025, the Australian Federal Court handed down its first contested set of decisions under the misuse of market power prohibition, finding Apple and Google breached the law.

Epic Games, the creator of Fortnite, alleged Apple and Google misused their market power in several ways by requiring app developers (among other matters) in relation to their mobile app distribution and in-app payments through their respective platforms. Epic Games argued that:

• Apple and Google had substantial market power and that they misused by requiring all apps to be distributed solely through their respective app stores; and that Apple prohibited alternative in-app payment processing and Google hindered alternative in-app payment processing and imposed Google’s payment systems; and
• Apple’s and Google’s conduct was unconscionable due to their imposition of non-negotiable agreements, expecting developers’ lack of bargaining power and enforcing terms that are unbalanced and one-sided and that serve the legitimate business interests.

The Court found that Apple and Google breached the misuse of market power prohibition but rejected the unconscionable conduct claims. It affirmed that unconscionable conduct should only be considered in extreme circumstances. Some of the behaviour raised by the ACCC did not amount to unacceptable commercial behaviour for participants with considerable market scale, the revenue it derives from non-iOS platforms, its voluntary entry into the contractual arrangements, or conduct in the same terms it had agreed with Apple but the unconscionability claim against Google for changes in the Google Play store listings. The Court also found the unconscionability claims in relation with Epic were the same as it applied to Apple. Apple was entitled to require developers to enter into agreements and in return provide benefits such as reliable software and tools to develop applications on its platform. Apple’s actions were not a warrant economic of harm in the face of ordinary commercial dealing.

By contrast, in ACCC v Quantum Housing Group (2021), the Federal Court upheld the ACCC’s appeal, finding that QHG engaged in unconscionable conduct when dealing with investors in relation to the National Rental Affordability Scheme (NRAS). QHG had devised and implemented a plan to encourage investors to transfer the management of properties that qualified for incentives under the NRAS to property managers who had commercial association with QHG. The Federal Court noted that the conduct was planned, deliberate and sustained; it exploited the circumstances of the NRAS; it involved a concerted effort to trick investors into switching property managers; and it was a ‘[long] course of conduct’ given that the ‘plan’ developed over time. Notably, the decision acknowledged the interface, or crossover of standards of business conscience behind the prohibition on unconscionable conduct and the misuse of market power as noted in the article “Two sides of the same coin: Reigniting the interface between Australian competition and consumer protection law” published in the Australian Competition and Consumer Law Journal. The Federal Court characterised Quantum’s conduct as, “misusing [its] superior bargaining power,” and commented on the interface between unconscionable conduct and misuse of market power:

“Surely to predate on vulnerable consumers or small business people is unconscionable. But why is it not also unconscionable to act in a way that is systemically dishonest, entirely in bad faith in undermining a bargain, … using a superior bargaining position, … [or] using significant market power in a way to extract an undisclosed fee that harms will harm others who are commercially related to the counterparty?”[2]

New Zealand context

Here in New Zealand the intersection between unconscionable conduct and misuse of market power emerged in 2024 when IRS International Pty Ltd, an Australian refrigerated containers company, obtained an interim injunction against depot owners, preventing them from increasing their depot access levels for container transfers. IRS International alleged misuse of market power arguing that the defendants were vertically integrated and the access charges squeezed out competitors in the downstream market, and unconscionable conduct arguing that the levy was initially imposed for health and safety costs but the fee has now expanded to include recouping for infrastructure which could not be justified as it does not occur at other depots in Australasia. The High Court acknowledged that while concurrent claims under both prohibitions are uncommon, they are not unprecedented in Australia and the policy underlying the prohibitions is related.

What to expect

The Commerce Commission has indicated, including in its webinar on 2025/26 enforcement priorities, that it has unconscionable conduct cases in the pipeline, particularly involving misleading sales tactics and vulnerable consumers, and will be actively looking for others.

Footnotes

[1] Commerce Commission “Unconscionable conduct” (2026).
[2] Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd [2021] FCAFC 40 at [91].