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Watchdog calls for merger veto powers as corporates push the boundaries

Australia’s merger laws were failing and companies were pushing the boundaries of the existing informal approval process, according to the nation’s consumer watchdog.

Apr 12, 2023, updated Apr 12, 2023
Australian Competition and Consumer Commission (ACCC) chair Gina Cass-Gotlieb addresses the National Press Club in Canberra. (AAP Image/Lukas Coch)

Australian Competition and Consumer Commission (ACCC) chair Gina Cass-Gotlieb addresses the National Press Club in Canberra. (AAP Image/Lukas Coch)

In a speech to the National Press Club, Australian Competition and Consumer Commission chair Gina Cass-Gottleb said the current merger laws were tilted too much towards allowing potentially anti-competitive mergers to proceed.

She said companies were manipulating the current informal system by not providing information, or giving wrong information and increasingly finalising a merger before the ACCC had a chance to review the information.

She said the ACCC needed the power to veto a merger because under the current system there was no requirement for company’s to notify the ACCC or even wait for clearance from the organisation.

Instead, the ACCC has to apply to the Federal Court to have a merger halted or unwound.

Her comments follow the ACCC recently warning that it was unconvinced about the public benefits of the planned $4.9 billion merger of ANZ and Suncorp’s banking business and had called for more information.

It is expected to make a decision on the proposed merger in the next few months.

“The ACCC needs to have the tools necessary to be able to properly scrutinise and, if necessary, prevent mergers that are likely to substantially lessen competition,” she said.

She proposed a formal regime in which the ACCC was notified of mergers that met certain thresholds. The ACCC would also need call-in powers to scrutinise transactions that don’t meet the notification threshold but still raise competition concerns.

There would also be clear requirements for relevant information to be provided to the ACCC.

“We are finding that businesses are pushing the boundaries of the informal regime,” Cass-Gottlieb said.

“Given that there are no up-front information requirements for an informal review, merger parties are increasingly giving us late, incomplete or incorrect information.

“An increasing number are threatening to complete their transaction before we have finalised our review. This leads to the situation where we find ourselves negotiating with the merger parties to obtain sufficient information and time to conduct our review.

“In global transactions, we often find that merger filings in other regimes that require mandatory clearances are prioritised over our voluntary, informal regime. This has hamstrung the ACCC’s ability to assess mergers and prevent potentially anti-competitive mergers.”

 

 

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