The Centrality of Rivalry

• Author: Rex Ahdar
• Date: 01 December 2021
• Published date: 01 December 2021
• DOI: 10.1177/0003603X211045435

Symposium: The Evolution of Competition Law and Policy in New Zealand

The Centrality of Rivalry

Rex Ahdar*

Abstract

The aim of this article is to argue that the old-fashioned idea of rivalry remains central to the concept of

effective competition and, in turn, to the promotion of the competitive process. Rivalry was the core

meaning of competition among the early economists. The concern with vigorous, sustained actual

rivalry may have been lost sight of, but it ought not to have been. Rivalry cannot of course be the

exhaustive focus for many other factors and influences affect the level of effective competition. But a

searching rivalry inquiry provides a valuable initial screen. By reemphasizing the primacy of rivalry, we

may also foster the ability of competition law to act not just as a key driver of economic efficiency and

growth, but also as a pro-democratic vehicle to check powerful private centers of economic power.

Keywords

rivalry, effective competition, pro-democratic goals, New Zealand

I. Introduction

In this article, I wish to underscore the importance of the old-fashioned idea of rivalry as central to the

concept of effective competition and, in turn, to the promotion of the competitive process. The object

of the Commerce Act 1986 is “to promote competition in markets for the long-term benefit of con-

sumers within New Zealand.”

1

I take the principal purpose of the Act to be to promote the competitive

process; when one is pursing effective competition, one is primarily looking for evidence of sustained,

vigorous rivalry between indepe ndent firms in the market under c onsideration. I say “primarily”

because there are, unquestionably, other factors (such as potential entry of new rivals or countervailing

power exercised by purchasers) that may point to the presence of effective competition despite an

apparent absence of rivalry in the field of commercial activity being investigated. Other influences

upon, or determinants of, competition (and its antithesis, undue market power) undoubtedly exist, but

this ought not, in my view, detract from the initial and central inquiry: Is there sustained rivalry

between independent businesses and will this be significantly diminished by the defendant’s proposed

behavior, practice, or merger?

* Faculty of Law, University of Otago, Dunedin, New Zealand

** School of Law, University of Notre Dame Australia, Fremantle, Australia.

Corresponding Author:

Rex Ahdar, Faculty of Law, University of Otago, Dunedin, Otago 9054, New Zealand.

Email: rex.ahdar@otago.ac.nz

1. Section 1A.

The Antitrust Bulletin

2021, Vol. 66(4) 510–524

ªThe Author(s) 2021

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DOI: 10.1177/0003603X211045435

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