Wilson Parking New Zealand Limited (Wilson Parking) has agreed to divest the leases of three car parking facilities it currently operates in central Wellington, in a settlement agreement with the Commerce Commission.
In June 2016, Wilson Parking New Zealand Limited acquired the long-term lease to operate the Capital car park (50-60 Boulcott Street), which comprised 659 parking bays available to the public. It did not apply for clearance from the Commission to acquire the lease.
The Commission began receiving customer complaints in February 2017 about price increases at the Capital car park, prompting it to investigate the acquisition under section 47 of the Commerce Act, which prohibits acquisitions that are likely to substantially lessen competition in a market.
The Commission alleging Wilson Parking substantially lessened competition for the supply of car parking in the Boulcott Street area when it acquired the rights to operate the Capital car park.
To resolve the proceedings, Wilson Parking provided court enforceable undertakings to the Commission, committing to divest the leases to three car parking facilities it currently operates, including Capital car park. The total number of parking bays being divested is 850. Wilson Parking will also pay $500,000 towards the Commission’s costs.
“Wilson Parking’s acquisition removed one of the few alternatives for motorists wishing to park in this part of Wellington’s central city, which, in our view, was likely to result in a substantial lessening of competition” said Commission Chair, Anna Rawlings.
“The divestment of three car parking facilities in the Wellington central area will reintroduce a measure of competition and will mean that customers will have an alternative to Wilson Parking.
“Anti-competitive acquisitions are a priority area for the Commission and this is a reminder to businesses that if there is any doubt about the competition effects of a merger, they should seek clearance from us before completing the deal.”
Wilson Parking must divest the car parking leases to a purchaser(s) approved by the Commission. It must also notify the Commission of any proposed acquisitions of new car parks in Wellington central for the next five years.
Background
Wilson Parking
Wilson Parking is New Zealand’s largest parking provider, operating 282 car parking facilities throughout the country. It is part of the wider Wilson Group that has similar parking operations in Australia and Asia.
Section 47 of the Commerce Act
Section 47 of the Commerce Act prohibits acquisitions that are likely to substantially lessen competition. The Commission administers a voluntary regime that allows businesses to apply for clearance if they consider their planned acquisition could raise competition issues. If businesses do not apply for clearance, the Commission can initiate an investigation into a proposed or completed merger under Section 47. If a person breaches Section 47 they may be subject to a penalty of up to $500,000 for an individual or $5 million for a firm.
Enforceable undertakings
Enforceable undertakings are a form of out-of-court negotiated settlement. Where the Commission believes there has been a breach of the Act, the Commission may accept enforceable undertakings. They may include agreements by a person or business to stop doing something, make compensation payments, publish corrective advertising or pay costs to the Commission. If the party does not keep to their agreement the Commission may apply to the Court to enforce the agreement.
