Merger Controls First Edition - J Sagar Associates

Gilbert + Tobin Australia
sectors for a set period of time. The model could require mandatory notification to the ACCC of acquisitions above a set
threshold by the declared institution.
The Government then issued a discussion paper canvassing support for the different models but failed to gather any clear
consensus as to whether there was, in practice, a substantive problem to be addressed. All the above models were
considered to be overly interventionist with high costs. Consequently, the Government responded to “specific problems
with specific remedies”, which can be seen in the current amendments.
Recently, the Federal Government has re-introduced its Competition and Consumer Legislation Amendment Bill (Bill)
which proposes to address the issue of “creeping acquisitions” and simplify the unconscionable conduct provisions in the
Australian Consumer Law (ACL). The Bill failed to pass the Senate after it was originally tabled in May 2010 and lapsed
as a result of the Federal election. The re-introduced Bill is practically identical to the original with the addition of some
minor technical amendments.
The proposed amendments in the Bill are designed to clarify the ability of the ACCC or courts to consider multiple markets
when assessing mergers and acquisitions. The changes will prevent businesses challenging a decision on grounds that the
lessening of competition identified was in one or more markets other than the primary market in which the merger or
acquisition would occur. It is not clear when the Bill will be passed.
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Endnotes
1 Based on Statistics in ACCC Annual Reports, 2004-05, 2005-06, 2007-08, 2008-09, 2009-10, and for 2010/11, on
a review of the ACCC Mergers Register, as at 30 June 2011. Note that totals may not be precise due to withdrawn
mergers. Some mergers are withdrawn after the ACCC publishes a negative Statement of Issues.
2 Australian Gas Light Co v Australian Competition and Consumer Commission [2003] FCA 1525.
3 See http://www.accc.gov.au/content/index.phtml/itemId/924341/fromItemId/751043.
4 CCA s 50(3). While all the merger factors must be taken into consideration, it may not be necessary for all factors
to indicate that the merged firm would face effective competitive constraints. In some cases a single effective
constraint can be sufficient to prevent a significant and sustained increase in the market power of the merged firm,
while in other cases the collective effect of several constraints may be required. Conversely, the absence of a single
particular constraint is unlikely to be indicative of an increase in market power as a result of a merger. Merger
Guidelines, paragraph 7.4.
5 Merger Guidelines, paragraph 7.62.
6 Merger Guidelines, section 5.
7 Merger Guidelines, paragraph 5.3.
8 Merger Guidelines, section 6.
9 Merger Guidelines, paragraphs 6.5-6.7.
10 Merger Guidelines, paragraphs 5.18-5.27.
11 It should be noted that the ACCC does not issue an SOI or PCA in all reviews, hence, this table represents a small
sample of of ACCC decisions. Where the ACCC issued both an SOI and a PCA in a transaction, the relevant theory
of harm has been counted only once.
12 See Dr J Walker, Developments in Competition Law, presented at the RBB Economics Australia Conference
Sydney, 8 June 2011, at 10-11.
See http://www.accc.gov.au/content/index.phtml/itemId/993868/fromItemId/8973.
13 Presentation by Graeme Woodbridge, ACCC Competition and Consumer Economics Unit, at RBB Economics
Australia conference, 8 June 2011.
14 Id.
15 Merger Process Review Guidelines, paragraph 4.79
16 Merger Review Process Guidelines, paragraph 4.79.
17 See http://www.accc.gov.au/content/index.phtml/itemId/963258/fromItemId/751043.
18 See ACCC Merger Guidelines, paragraphs 3.16-3.19.
19 See, e.g., Australian Gas Light Co v ACCC (No 3) (2003) 137 FCR 317; Dandy Power Equipment Pty Limited v
Mercury Marine Pty Ltd (1982) 44 ALR 173.
20 See, e.g., ACCC Merger Guidelines, paragraph 3.19.
21 http://www.accc.gov.au/content/index.phtml/itemId/956971/fromItemId/751043.
22 http://www.accc.gov.au/content/index.phtml/itemId/956971/fromItemId/751043.
23 http://www.accc.gov.au/content/index.phtml/itemId/956971/fromItemId/751043.
24 As Metcash determined to complete the transaction, the matter is currently before the Court, on the ACCC’s
application for an injunction to prevent the merger from proceeding.
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