Metservice and the National Institute of Water and Atmospheric Research (NIWA) are under investigation by the Commerce Commission for anti-competitive behaviour.
The Commerce Commission has confirmed to Newshub a probe was opened into the two agencies under section 27 and/or 36 of the Commerce Act.
Section 27 concerns practices of "substantially lessening competition in a market" while Section 36 is about "taking advantage of market power".
A spokesperson for the commission wouldn't go into further detail as the investigation is ongoing, but Weatherwatch claims it began the investigation after reviewing recent quotes for observational and rain radar data provided to Weatherwatch by Metservice and NIWA.
Metservice is a state-owned enterprise, while NIWA is a Crown-owned company.
In a release, forecaster Weatherwatch celebrated the news, saying that "for several years", the Commerce Commission had been considering complaints from Weatherwatch against Metservice and NIWA.
It said it had told the commission for years that NIWA and Metservice pricing was "astronomical".
NIWA told Newshub it welcomes the Commerce Commission's investigation, but will not be not commenting further while the inquiry is under way.
"The investigation from the Commerce Commission relates to a complaint made by WeatherWatch about pricing and terms which competitors can access weather data from MetService and NIWA," Metservice said in a statement to Newshub on Monday.
"We do not yet have any detailed information about the investigation, but MetService will fully cooperate with all investigations led by the Commerce Commission on this matter."