Monopolies are running riot in NZ. Air NZ, which is majority state owned, for one. Auckland Airport, which is part owned by the Council. The Big Banks, of which State owned Kiwi Bank is one. Fletcher Building that was kept afloat by the government's wage subsidy. The Big Supermarkets that were given a State Monopoly License during the Covid lockdowns whilst small green grocers were bankrupted. The Commerce Commission hasn't scratched them. It is ineffective.
It should go the way of the Productivity Commission and be wound up. To appear its doing something, it has decided to go after the likes of children selling fund-raising cakes on the street corner for racketeering. Well, not quite. But this week Com Com tried to look tough by filing criminal charges against One NZ (formerly Vodafone) for saying in adverts it will offer “100% mobile coverage. Launching 2024”. One NZ is teaming up with Elon Musk's Star Link. As a reward for such innovative practices, and for NZ business building relations with the world's best-known entrepreneur, richest man and Trump White House Adviser, Com Com has decided to wage war against the company.
The Commission says One NZ has breached the Fair Trading Act, since its advert is "likely mislead consumers because it gives an .. impression that .. [they] would have access to instant communication from all locations in NZ when, in fact, that may not be the case.” It says, "coverage will be accessible only in locations where a mobile phone has line of sight to the sky. This means users may not be able to access the service inside a building, a car, or underneath trees”. Don't stop there, Com Com. Go file international criminal charges against Musk for saying, "SpaceX plans to send 5 rockets to Mars in 2026". How dare he cheat the world with such claims. How dare he monopolize Mars.
Now compare One NZ's claims with Otago University's. Google it and you will find, "The University of Otago is ranked in the top 1% of universities in the world". That's flat-out false. The University has repeated it for ages. The QS rankings which Otago says its "top 1%" claim is based on, do not rank it in the top 1%. Nor in the top 10%. Why does Otago keep repeating the falsity? For love of money. To recruit more students. Improve its weak finances. Bolster its education business. The University is an oligopoly. And if you're looking for collusion, the NZ Vice Chancellors talk amongst themselves all the time. They formally meet six times a year to discuss strategy, and talk informally regularly. Otago is far more dominant in its non-market than One NZ is in its one, since there are only a handful of universities in NZ. There are only two major ones in the South Island, of which Otago is largest. On metrics like staff numbers and funding, Otago is the second biggest in NZ. Its engaged in plans to stop Waikato from getting a Medical School, since that would threaten Otago's duopoly (with Auckland). It is spending money on that campaign as we speak.
So there we have it: Otago runs a misleading promotional campaign "to influence consumer purchasing decisions" and strengthen its monopoly, it colludes with its oligopoly partners, and is battling to run a potential competitor out of town. Does it come under the auspices of the Commerce Commission? Too right it does. Com Com's former Chair, Alan Bollard, stated "tertiary institutions are in competition with each other for students, and they are not exempted from the Act which .. prohibits anti-competitive behavior". Is it because tertiary outfits are so left in their politics, are publicly funded, or because former Labour-aligned politicians like Grant Robertson are their Vice Chancellors, that one law applies to them and another to the most innovative private sector companies in the country, like One NZ?
Sources:
https://comcom.govt.nz/news-and-media/media-releases/2024/comcom-takes-legal-action-over-one-nzs-100-coverage-claims-for-spacex-service
https://comcom.govt.nz/news-and-media/media-releases/archive/commerce-commission-investigates-tertiary-education-institution-mergers#
The Commission says One NZ has breached the Fair Trading Act, since its advert is "likely mislead consumers because it gives an .. impression that .. [they] would have access to instant communication from all locations in NZ when, in fact, that may not be the case.” It says, "coverage will be accessible only in locations where a mobile phone has line of sight to the sky. This means users may not be able to access the service inside a building, a car, or underneath trees”. Don't stop there, Com Com. Go file international criminal charges against Musk for saying, "SpaceX plans to send 5 rockets to Mars in 2026". How dare he cheat the world with such claims. How dare he monopolize Mars.
Now compare One NZ's claims with Otago University's. Google it and you will find, "The University of Otago is ranked in the top 1% of universities in the world". That's flat-out false. The University has repeated it for ages. The QS rankings which Otago says its "top 1%" claim is based on, do not rank it in the top 1%. Nor in the top 10%. Why does Otago keep repeating the falsity? For love of money. To recruit more students. Improve its weak finances. Bolster its education business. The University is an oligopoly. And if you're looking for collusion, the NZ Vice Chancellors talk amongst themselves all the time. They formally meet six times a year to discuss strategy, and talk informally regularly. Otago is far more dominant in its non-market than One NZ is in its one, since there are only a handful of universities in NZ. There are only two major ones in the South Island, of which Otago is largest. On metrics like staff numbers and funding, Otago is the second biggest in NZ. Its engaged in plans to stop Waikato from getting a Medical School, since that would threaten Otago's duopoly (with Auckland). It is spending money on that campaign as we speak.
So there we have it: Otago runs a misleading promotional campaign "to influence consumer purchasing decisions" and strengthen its monopoly, it colludes with its oligopoly partners, and is battling to run a potential competitor out of town. Does it come under the auspices of the Commerce Commission? Too right it does. Com Com's former Chair, Alan Bollard, stated "tertiary institutions are in competition with each other for students, and they are not exempted from the Act which .. prohibits anti-competitive behavior". Is it because tertiary outfits are so left in their politics, are publicly funded, or because former Labour-aligned politicians like Grant Robertson are their Vice Chancellors, that one law applies to them and another to the most innovative private sector companies in the country, like One NZ?
Sources:
https://comcom.govt.nz/news-and-media/media-releases/2024/comcom-takes-legal-action-over-one-nzs-100-coverage-claims-for-spacex-service
https://comcom.govt.nz/news-and-media/media-releases/archive/commerce-commission-investigates-tertiary-education-institution-mergers#
Professor Robert MacCulloch holds the Matthew S. Abel Chair of Macroeconomics at Auckland University. He has previously worked at the Reserve Bank, Oxford University, and the London School of Economics. He runs the blog Down to Earth Kiwi from where this article was sourced.
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