New Zealand Government Introduces Legislation to Raise Fair Trading Penalties to $5 Million

The New Zealand Government has formally introduced the Fair Trading Amendment Bill to Parliament, marking a significant shift in the regulatory landscape for businesses operating across the country. Announced on May 13, 2026, by Economic Growth Minister Nicola Willis and Commerce and Consumer Affairs Minister Cameron Brewer, the legislation proposes a substantial escalation in financial penalties for companies found to be engaging in misleading pricing or deceptive commercial practices. The move is intended to ensure that consumers pay the prices they see advertised and to prevent large organisations from treating legal breaches as a routine cost of doing business.

Under the new framework, the maximum corporate penalty for breaches of the Fair Trading Act will rise from the current NZ$600,000 to a new ceiling of NZ$5 million. However, the proposed law introduces a more flexible and punitive structure, allowing courts to impose fines that are the greater of:

• NZ$5 million;
• three times the value of commercial gain resulting from the breach; or
• the value of the transactions involved in the contravention.

This multi-tiered approach is designed to ensure that the financial consequences of illegal activity are proportionate to the scale of the harm caused and the profits generated by the offending organisation. By aligning penalties with the value of transactions or commercial gain, the government aims to remove the financial incentive for large-scale deceptive practices that might otherwise remain profitable even after paying a fixed-sum fine.

Deterring Deceptive Business Practices

The reform also addresses the accountability of individuals within organisations. The maximum penalty for individuals will increase from the current NZ$200,000 to NZ$1 million for most breaches. This five-fold increase reflects a commitment to holding decision-makers responsible for the conduct of their firms. The Ministry of Business, Innovation and Employment (MBIE) and the Parliamentary Counsel Office have worked to ensure the legislation provides a robust deterrent against conduct that undermines market integrity.

Economic Growth Minister Nicola Willis stated that the current penalty levels have become outdated and fail to provide a sufficient deterrent for large corporations.

This legislation ensures that the consequences of breaking the law are no longer just a line item in a corporate budget, but a significant financial risk that reflects the harm done to New Zealand consumers.

Commerce and Consumer Affairs Minister Cameron Brewer emphasised that the changes are particularly relevant given the current economic climate. With households facing sustained cost-of-living pressures, the accuracy of pricing in retail and service sectors is critical. The Commerce Commission estimates that pricing errors currently cost New Zealanders Tens of millions of dollars annually. These errors, whether intentional or the result of systemic negligence, reduce the disposable income of families and erode trust in the retail sector.

Digital Protections and Safety Standards

Beyond financial penalties, the Fair Trading Amendment Bill introduces measures to modernise the consumer protection framework for the digital age. A new 'safe harbour' legal defence will be established for online service providers. This provision is designed to encourage and assist online platforms in the rapid removal of suspected scam content. By providing a clear legal framework for these actions, the government aims to reduce the prevalence of fraudulent advertisements and deceptive digital content that targets New Zealanders.