The global dominators

The Commerce Commission should enable greater merging of NZ entities to more effectively compete with global scale disruptors.

Global technology companies by virtue of their scale and network effects clearly present a threat to New Zealand businesses. But the CEOs are sharply divided on what the response should be.

Asked if they should be constrained in New Zealand or have their market power investigated by the Commerce Commission, 38 per cent said yes, 34 per cent said no, and a further 28 per cent were unsure.

A handful of CEOs portrayed pointed concern in their comments — one arguing in relation to Amazon’s expected arrival that “there are currently few who truly understand how ubiquitous their presence will become”.

“Possibly,” answered another. “Need to be careful with these companies.” Others were less sure. “As long as their market activity is on equal grounds with the rest of us, then we must learn to compete accordingly,” said Don Braid, group managing director at Mainfreight.

“I don’t think you can hold out against global trends without looking rather silly,” said a chair of two high profile companies.

The impact of global technology giants Google and Facebook on New Zealand news media was cited by NZME and Fairfax (now Stuff) in their unsuccessful merger application to the Commerce Commission.

The argument was made that in a digital economy NZME and Fairfax now compete with Facebook and Google for advertisers — and the merger would have allowed them to compete with the scale of those companies.

That theory was reflected in the comments of another Mood of the Boardroom respondent who also operates in the media sector.

“The Commerce Commission should enable greater merging of NZ entities to more effectively compete with global scale disruptors.”

But with a sizeable chunk of respondents answering “unsure”, it was evident that CEOs had not yet come to anything close to a consensus on what may be one of the major emerging issues of the next few years.

“The question combines two very different actions,” said a legal chair.

“An investigation to ascertain whether there is a misuse of market power is appropriate; jumping to a conclusion and constraining without first having an investigation to find the facts is not.”