The Commerce Commission has recently upheld Telecom New Zealand’s response to the entry of a competitor into the local telephony market, where lower prices were offered solely in the target area and not elsewhere throughout New Zealand. The Commission concluded that Telecom was only 'meeting competition' and that this did not constitute an abuse of a dominant position or substantially lessen competition. The finding that Telecom was still pricing above average incremental cost (being the appropriate measure of cost submitted by Telecom) was critical in the Commission’s conclusions.

David Moorman
Simpson Grierson
Auckland