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ACCC chair Gina Cass-Gottlieb has called for merger law reforms to protect competition in Australia’s current period of economic uncertainty.
Australian Competition and Consumer Commission (ACCC) chair Ms Cass-Gottlieb spoke to the National Press Club in Canberra today (12 April 2023), urging for reforms to Australia’s merger laws after she stated they are “no longer fit for purpose” and are “tilted too much towards allowing potentially anti-competitive mergers to proceed”.
Ms Cass-Gottlieb expressed concern that consumers and the Australian economy are “particularly exposed” in the current economic environment due to supply chain pressures, geopolitical issues and the climate change transition.
Technological change and the power of digital platforms only added to this complexity, she added.
“Part of responding to these challenges is to encourage competitive, innovative and dynamic markets. Australia’s current merger regime is not well placed to deal with these issues,” Ms Cass-Gottlieb said.
Currently, Australia’s laws forbid mergers that are likely to result in a significant lessening of competition, however those laws don’t require parties of planned mergers to notify or wait for clearance from the ACCC before merger completion.
As a result, the ACCC must apply to the Federal Court to halt or unwound a merger if parties do not abandon or revise transactions that the ACCC deems as anti-competitive.
“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,” Ms Cass-Gottlieb said.
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“Without these tools, some markets are particularly vulnerable to being adversely affected by further consolidation.
“In particular, markets that already have large incumbents with positions of market power and markets where it is difficult for new rivals to enter.”
The ACCC is proposing a formal clearance model which would mean merger parties would be required to convince the ACCC that the proposed transaction is unlikely to substantially lessen competition, after which the Australian Competition Tribunal would have the ability to review the ACCC’s decisions.
In addition, a formal regime would include a requirement that the regulatory body be notified of mergers that specifically meet materiality thresholds.
ACCC flags concerns over Suncorp-ANZ deal
The ACCC called for further submissions from industry and consumers on how ANZ’s proposed acquisition of Suncorp Bank may impact competition.
On 2 December 2022, the ACCC received an application for merger authorisation from ANZ Banking Group (ASX:ANZ) in relation to its proposal to acquire Suncorp Group’s (ASX:SUN) banking arm (first announced in July 2022).
The proposed acquisition involves ANZ acquiring the banking arm of Suncorp Group, separate from the group’s insurance businesses in Australia in New Zealand, which do not form part of the acquisition.
The ACCC released its statement of preliminary views seeking further comment from interested parties after receiving 24 public submissions on issues such as the extent to which the acquisition will impact lending rates, deposit rates, fees and charges, consumer choice, service levels and innovation.
The ACCC’s preliminary view was that the areas of competition between ANZ and Suncorp Bank that have the most potential to raise competition concerns stem from the activities in which they overlap, as these are the areas where interested parties “have raised the most issues”.
[RELATED: ANZ ‘confident’ over Suncorp deal]
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