While the ACCC continues to believe that Australia’s current merger laws aren’t fit for purpose, it appears to have refined its thinking on aspects of the proposals first unveiled in August 2021, following comments made by ACCC Commissioner Stephen Ridgeway during a keynote discussion at the Mergermarket M&A Forum Australia today.
Any reform remains in the hands of the Government, with the ACCC continuing to engage with Treasury and the Government on the issues – meaning that reform is likely to be some way off.
Of the raft of proposals unveiled in August 2021, it seems the following are still squarely on the agenda:
- Mandatory and suspensory regime - It’s not surprising that a move to a formal mandatory and suspensory merger control regime remains on the table, given Australia is one of only a few jurisdictions that has a ‘voluntary’ merger clearance process. You can read our earlier analysis on what a mandatory and suspensory regime may look like here. The devil would clearly lie in the details, with appropriate thresholds for notification still to be worked through. It also seems that the ACCC continues to be contemplating some form of waiver process so that non-controversial deals that hit the relevant thresholds could be reviewed on an expedited basis.
- Appeal rights for ACCC merger decisions limited to the Competition Tribunal – It seems that the ACCC continues to view the Tribunal as the best suited body to deal with appeals in merger matters. This is consistent with the views previously expressed by Sims that ‘[w]e think the Tribunal, with its composition of a Federal Court judge and economic and business members, provides the most suitable body to review merger decisions. Enabling the Tribunal to review ACCC decisions rather than the Federal Court should also provide a quicker and less costly process.'
- Digital platforms remain in the spotlight – There also continues to be calls for some form of special rules to apply in the digital platform space, although no further detail has been provided as to what this may look like. In the 5th digital platform services inquiry report the ACCC didn’t make any recommendations related to merger reform on the basis that this would be best addressed through an economy-wide review of Australia’s merger laws. It did, however, say that any such economy-wide review should ‘examine the challenges involved in adequately addressing the competition effects of serial strategic acquisitions by digital platforms’.
Whether other reform proposals will continue to be pressed by the ACCC is less clear, with the following proposals potentially in doubt following further ACCC consultation and consideration:
- Introduction of a new statutory definition of ‘likely’. Case law has established that ‘likely’ means a ‘real chance’, and the ACCC may be content to accept that position.
- Introduction of a new and separate merger test for corporations with substantial market power. The previous proposal was that mergers involving businesses with substantial market power would be deemed to have the effect of substantially lessening competition where the transaction would likely result in that market power being entrenched, materially increased, or materially extended. We thought this proposal was fraught with difficulty and unwarranted, and the ACCC may have reached the same conclusion.
