Merger control in Australia: overview

A Q&A guide to merger control in Australia.

The Q&A gives a high level overview of merger control, regulatory framework and regulatory authorities, relevant triggering events and thresholds in Australia. It also covers notification requirements, procedures and timetables, publicity and confidentiality, third party rights, substantive test, remedies, penalties, appeals, joint ventures and proposals for reform.

For information on restraints of trade, monopolies and abuses of market power in Australia, visit Restraints of trade and dominance in Australia: overview.

This Q&A is part of the global guide to competition and cartel leniency. For a full list of jurisdictional Merger Control Q&As visit www.practicallaw.com/mergercontrol-guide. For a full list of jurisdictional Restraints of Trade and Dominance Q&As visit www.practicallaw.com/restraintsoftrade-guide.

For a full list of jurisdictional Cartel Leniency Q&As, which provide a succinct overview of leniency and immunity, the applicable procedure and the regulatory authorities in multiple jurisdictions, visit www.practicallaw.com/leniency-guide.

Michele Laidlaw and Johanna Croser, Johnson Winter & Slattery
Contents

Regulatory framework

1. What (if any) merger control rules apply to mergers and acquisitions in your jurisdiction? What is the regulatory authority?

Regulatory framework

Australia's merger control rules are contained in the Competition and Consumer Act 2010 (CCA). There are two main provisions (see Question 2, Triggering events).

Regulatory authority

The Australian Competition and Consumer Commission (ACCC) and the Australian Competition Tribunal (Tribunal) are the key regulatory authorities responsible for merger control in Australia.

The ACCC is Australia's national competition regulator. It can:

  • On application, make informal and formal merger clearance determinations.

  • Enforce Australia's merger control rules through the Australian Courts. For example, it can seek an injunction to prevent a merger proceeding or seek divestiture orders and civil pecuniary penalties if a merger has taken place.

The Tribunal can, on application, in certain circumstances:

  • Authorise mergers and acquisitions on public benefit grounds.

  • Review formal merger clearance determinations by the ACCC.

  • Grant section 50A declarations.

See box, The regulatory authority.

 

Triggering events/thresholds

2. What are the relevant jurisdictional triggering events/thresholds?

Triggering events

Section 50, Competition and Consumer Act 2010 (CCA). This prohibits the direct or indirect acquisition of shares or assets by a body incorporated in Australia, carrying on business in Australia or registered as a foreign corporation in Australia, or by an Australian citizen or person ordinarily resident in Australia, that would have the effect or likely effect of substantially lessening competition in a market in Australia. There is no threshold shareholding for the purposes of section 50 and all acquisitions (including minority interests) are subject to the CCA, where the test is the effect on competition, rather than a concept of "control".

Section 50A, CCA. This applies to acquisitions outside Australia, such as international mergers, which result in the acquisition of a controlling interest in an Australian corporation. A controlling interest is an acquisition that results in the corporation becoming (directly or indirectly) a subsidiary of the acquirer. A corporation will be a subsidiary if another body corporate either:

  • Controls the composition of its board of directors.

  • Is in a position to cast more than one-half of the maximum number of votes that can be passed at a general meeting.

  • Holds more than one-half of the issued share capital.

On application, the Tribunal can make a declaration preventing the Australian corporation from carrying on business in the relevant Australian markets, if the acquisition would have the effect or likely effect of substantially lessening competition in a market in Australia without offsetting public benefits. The following parties can make the application:

  • The Australian Treasurer.

  • The Australian Competition and Consumer Commission.

  • Any other person.

There are no other jurisdictional thresholds (such as turnover or market shares) for the application of Australia's merger control rules.

Limitation periods

The limitation period within which the ACCC must bring a claim for a section 50 breach depends on the orders sought, namely:

  • An application for divesture orders or a declaration that the acquisition is void must be brought within three years of the breach.

  • An application for civil pecuniary penalties must be brought within six years of the breach.

A party can only make an application to the Tribunal for a declaration under section 50A within 12 months of the acquisition.

 

Notification

3. What are the notification requirements for mergers?

Mandatory or voluntary

Notification of a merger to the Australian Competition and Consumer Commission (ACCC) is voluntary. However, the ACCC Merger Guidelines encourage parties to notify the ACCC of mergers in which:

  • The Acquirer will have a post-merger share of more than 20% of a market in Australia.

  • The Acquirer and the target company supply substitutable or complementary goods or services.

The ACCC can investigate mergers that do not satisfy these thresholds.

Most mergers that are likely to have an appreciable effect on competition in Australia are voluntarily notified to the ACCC before completion. If the merger parties do not notify the ACCC or apply to the Tribunal for authorisation, the ACCC has wide powers to conduct an investigation of the merger. This includes:

  • Compulsory production of documents.

  • Provision of information.

  • Interviews of individuals under oath.

Types of notification and timing

There are a number of informal and formal ways to notify a proposed merger. The informal processes are the most commonly used. Since their introduction in 2007, the formal clearance process has not been used and the authorisation process has only been used three times.

Informal processes

The ACCC has published the Informal Merger Review Process Guidelines (the Process Guidelines) that set out the administrative process the ACCC uses to undertake its informal assessments of mergers or acquisitions. There is no statutory timeline for informal clearance but the Process Guidelines recommend that parties notify a proposed transaction with sufficient time for the informal process to be finalised before completion.

The Process Guidelines identify three categories of non-statutory merger assessment:

Pre-assessment. The ACCC forms a view, based on the information provided by the parties, that neither a confidential nor a public review is required, as the risk of a substantial lessening of competition is low. The typical duration for this process is about two weeks.

Conditional confidential clearance. The ACCC can provide a preliminary, conditional view on a confidential merger proposal if it considers the merger cannot be pre-assessed. The ACCC can decide that:

  • The proposal does not appear to raise competition concerns.

  • It wishes to conduct a public review once the transaction is public (see below, Public review).

The typical duration for this process is about two to four weeks.

Public review. The ACCC issues a final decision after either of the following:

  • Market inquiries.

  • Second phase investigation following the publication of a Statement of Issues that sets out the ACCC's preliminary competition concerns.

A public review can take between six weeks and six months, or longer, depending on the nature and extent of the ACCC's concerns with the proposed merger.

Formal processes

ACCC formal clearance. A formal statutory process which, if granted, results in statutory immunity from prosecution. The parties must notify the ACCC before the transaction reaches completion. The ACCC must make a decision within 40 days. This can be extended by 20 days.

Tribunal authorisation. A formal statutory process in which immunity from prosecution is granted if the proposed merger is likely to result in a net public benefit to Australia. The parties must make an application to the Tribunal before the transaction reaches completion. The Tribunal must make a determination within:

  • Three months.

  • A period of up to six months, as extended by the Tribunal.

Pre-notification formal/informal guidance

No formal guidance can be obtained from the ACCC. Informal guidance can be obtained from the ACCC prior to notification.

Responsibility for notification

The acquirer usually notifies the ACCC, as primary liability for breaches of section 50 of the Competition and Consumer Act 2010 (CCA) lies with the acquirer.

Relevant authority

Notifications under the informal processes or for a formal merger clearance are made to the ACCC. The acquirer may also apply to the Tribunal for authorisation on net public benefit grounds.

Form of notification

There is no prescribed form for the informal processes. Applications can be by way of letter or submission. They generally include:

  • A description of the proposed acquisition, the parties, and the affected markets.

  • Reasons why the proposed acquisition would not substantially lessen competition in any market in Australia.

A formal merger clearance application to the ACCC must be made on a Form O (www.accc.gov.au/system/files/Form%20O%20-%20Application%20for%20s50%20merger%20clearance.pdf). A formal merger clearance application to the Tribunal must be made on a Form S (www.competitiontribunal.gov.au/lodging-documents/forms/forms.pdf).

Filing fee

There are no filing fees for the informal processes. The filing fee for a formal merger clearance application to the ACCC or an authorisation application to the Tribunal is A$25,000.

Obligation to suspend

There is no statutory obligation to suspend a transaction pending the outcome of the informal processes. If the ACCC has some concerns about a merger it is reviewing, it may seek an undertaking from the parties that they will not complete the merger until the informal process is concluded.

Generally, parties will not complete a merger until the informal process is concluded because if they do, the ACCC can take court action to prevent the merger proceeding or to unwind the transaction.

A merger party seeking formal clearance from the ACCC or authorisation from the Tribunal must provide a court enforceable undertaking to the ACCC that the acquisition will not be completed while the application is being considered. There is no possibility to waive this (see regulation 73, CCR and section 95AE(2), CCA).

 

Procedure and timetable

4. What are the applicable procedures and timetable?

The procedures and timeframes below apply to the public notification processes set out in Question 3.

Informal public review. On receipt of an application, the Australian Competition and Consumer Commission (ACCC) conducts market inquiries. This provides an opportunity for interested third parties to make submissions to the ACCC. The ACCC then announces its findings in the form of a final decision or a Statement of Issues (SOI). This typically takes six to twelve weeks from the time of the application. If an SOI is published, the ACCC sets a secondary timeline for the review and commences public consultation on the SOI. After a further round of market inquiries and further information from the merger parties, the ACCC announces its final decision. This typically takes six to 12 weeks after the SOI is published. The ACCC can choose to provide a Public Competition Assessment (PCA) setting out its reasons for its final decision. As the process is informal, these timelines are for guidance only and can be extended. In addition, the ACCC typically "stops the clock" if it requests further information from the merger parties or the merger parties ask for more time to respond to issues raised.

ACCC formal clearance. The ACCC will notify the merger parties within five business days if it considers the application to be invalid. Alternatively, the ACCC must issue a decision within 40 business days (if it does not, the application is taken to be refused). The time allowed for the ACCC to make a determination can be extended if the applicant agrees for the ACCC to take a specified longer period to make the decision or, if before the end of the 40-day period, the ACCC decides to extend the period by a further 20 days because of special circumstances. The ACCC can grant clearance with additional conditions in the form of a court enforceable undertaking.

Tribunal authorisation. The Tribunal will notify the applicant within five business days if it considers the application to be invalid. Alternatively, the Tribunal must make a determination within three months (or if the merger raises complex issues, within six months), and if it does not, the application is taken to be refused.

For an overview of the notification process, see Merger notification flowchart: Australia.

 

Publicity and confidentiality

5. How much information is made publicly available concerning merger inquiries? Is any information made automatically confidential and is confidentiality available on request?

Publicity

Informal public reviews. Information provided to the Australian Competition and Consumer Commission (ACCC) in a pre-assessment or in an application for confidential clearance is kept strictly confidential.

The ACCC maintains a register of applications for informal public reviews. The register includes:

  • A short description of the acquisition, the affected industries, and the parties.

  • An indicative timeline for the ACCC review, the ACCC's letter to market participants, and the ACCC's findings (including any Statement of Issues and PCA).

Because they are generally treated as confidential by the ACCC, the register does not include:

  • The merger parties' submissions and information provided.

  • The results of market inquiries.

Formal processes and Tribunal authorisation. The ACCC formal clearance and Tribunal authorisation processes are statutory, public processes in which the ACCC publishes:

  • The application.

  • Any document provided to the ACCC or the Tribunal.

  • Information about any oral submission made to the ACCC or the Tribunal in relation to the application.

  • The ACCC or Tribunal's determination and the reasons for the determination.

The applicants and third parties have limited rights to claim confidentiality (see below, Confidentiality on request).

Automatic confidentiality

Information provided to the ACCC under the informal processes is generally kept confidential (see above, Publicity). Information provided under the formal processes is generally not kept confidential.

Confidentiality on request

The parties can request the exclusion of certain information from publication because of its confidential nature.

The ACCC's Guidelines for excluding information from the public register for authorisation, merger clearance and notification processes set out the way in which the ACCC will assess such requests under the formal clearance processes.

If an applicant or interested party makes a request to exclude information because of its confidential nature, it should provide the ACCC with both redacted and unredacted versions of their submission.

 

Rights of third parties

6. What rights (if any) do third parties have to make representations, access documents or be heard during the course of an investigation?

Representations

For all public notification processes, third parties can make representations to the Australian Competition and Consumer Commission (ACCC) and be heard during the course of the ACCC's review. Third parties do not need to have a special interest in the transaction.

Informal public reviews. Once the proposed merger is announced (and after any Statement of Issues is published), the ACCC will conduct market inquiries during which they will consult third parties. Often the ACCC will actively solicit input by writing to key customers, competitors and suppliers.

Formal processes. The ACCC will publish a copy of the application with relevant documents, subject to any confidentiality claims, on its public register. The ACCC or the Tribunal will invite interested parties to make submissions.

Document access

Informal public reviews. Third parties will not be able to access submissions provided to ACCC by the applicants or other third parties.

Formal processes. The application and all relevant documents will be made publicly available, subject to any confidentiality claims.

In limited circumstances, it may be possible to apply for access to documents in the ACCC's possession under freedom of information laws.

Be heard

Third parties have the ability to be heard during the formal processes.

 

Substantive test

7. What is the substantive test?

Informal and formal ACCC merger clearance

The substantive test is whether the merger will have the effect or likely effect of substantially lessening competition in a market in Australia.

The Australian Competition and Consumer Commission (ACCC) must consider the following non-exhaustive list of factors when assessing the proposed transaction (section 50(3), Competition and Consumer Act 2010):

  • Actual and potential level of import competition in the market.

  • Barriers to entry.

  • Market concentration.

  • Countervailing power.

  • Acquirer's ability to significantly and sustainably increase prices or profit margins post-acquisition.

  • Availability of substitutes.

  • Dynamic characteristics of the market, including growth, innovation and product differentiation.

  • Removal of a vigorous and effective competitor.

  • Degree of vertical integration.

The ACCC also considers the potential for co-ordinated effects.

Tribunal authorisation

The substantive test is whether the merger gives rise to a net public benefit. Benefits to the public include:

  • A significant increase in the real value of exports.

  • A significant substitution of domestic products for imported goods.

The Tribunal must also take into account all other relevant matters that relate to the international competitiveness of any Australian industry.

 
8. What, if any, arguments can be used to counter competition issues (efficiencies, customer benefits)?

Informal and formal ACCC merger clearance

Under the Australian Competition and Consumer Commission (ACCC)'s Merger Guidelines, the ACCC generally only considers merger-related efficiencies if:

  • The efficiencies involve a significant reduction in the marginal production cost of the merged firm.

  • There is clear and compelling evidence that the resulting efficiencies:

    • directly affect the level of competition in a market; and

    • will not be dissipated post-merger.

Tribunal authorisation

The Tribunal may take non-competition issues and efficiencies into account when considering if the proposed acquisition would produce net public benefits.

 
9. Is it possible for the merging parties to raise a failing/exiting firm defence?

It is possible for the merging parties to raise a failing firm defence.

The Australian Competition and Consumer Commission's Merger Guidelines state that, in general, to show that a merger will not substantially lessen competition because of the prospective failure of one of the merger parties, it is necessary to show that:

  • The relevant firm is in imminent danger of failure and is unlikely to be successfully restructured without the merger.

  • In the absence of the merger, the assets associated with the relevant firm, including its brands, will leave the industry.

  • The likely state of competition with the merger would not be substantially less than the likely state of competition after the target has exited and the target's customers have moved their business to alternative sources of supply.

 

Remedies, penalties and appeal

10. What remedies (commitments or undertakings) can be imposed as conditions of clearance to address competition concerns? At what stage of the procedure can they be offered and accepted?

Merger parties can provide court enforceable undertakings to the Australian Competition and Consumer Commission (ACCC) or Tribunal (section 87B, Competition and Consumer Act 2010). These can be structural or behavioural measures. The ACCC prefers structural undertakings. However, behavioural undertakings can sometimes be a suitable addition to a structural remedy.

Divestiture is the most common form of structural remedy accepted by the ACCC. A divestiture seeks to remedy anti-competitive effects by either:

  • Creating a new source of competition through the disposal of shares, interests, a business or a set of assets to a new and competitive market participant.

  • Strengthening an existing source of competition through disposal to an existing market participant independent of the merging parties.

Merger parties can offer undertakings at any time, including after the ACCC's decision to oppose a merger. The ACCC generally requires all undertakings to provide for the appointment of an ACCC approved independent auditor to monitor and report compliance, generally on an annual basis.

 
11. What are the penalties for failing to comply with the merger control rules?

Failure to notify correctly

Individuals and companies can be liable for civil penalties if they provide false or misleading information to the Australian Competition and Consumer Commission (ACCC) or Tribunal in relation to formal clearances or authorisations. The civil penalties can be up to A$33,000 for a company and A$6,600 for an individual.

Clearances and authorisations granted on the basis of false or misleading information can be revoked. If the acquisition is found to be in breach of section 50 of the Competition and Consumer Act 2010 (CCA), the Federal Court can also stop the acquisition or order divestiture of the shares or assets.

A party which is unable to implement a section 87B undertaking will be considered in breach of that undertaking. The ACCC may bring Federal Court proceedings against such parties seeking:

  • An order directing compliance.

  • A pecuniary penalty.

  • Any other appropriate penalty.

Implementation before approval or after prohibition

If a merger is implemented before the parties have obtained approval or after the ACCC has opposed the transaction, the ACCC can commence an action in the Federal Court, seeking either:

  • An injunction to prevent a merger proceeding.

  • An order for divestment and a declaration that the acquisition is void if the merger has taken place.

In addition, the ACCC may seek pecuniary penalties for a breach of section 50 of the CCA:

  • For corporations, of up to the greater of:

    • A$10 million;

    • three times the value of the benefits obtained; or

    • 10% of the Australian annual turnover of the corporation and its related entities in the preceding 12 months.

  • For individuals who have intentionally participated in the breach, of up to A$500,000, as well as banning orders.

Failure to observe

If the merger parties fail to observe a decision by the ACCC or Tribunal under the formal processes, the ACCC will usually apply to the Federal Court for either:

  • An injunction to prevent the merger proceeding.

  • An order for divestment and a declaration that the acquisition is void if the merger has taken place.

The ACCC can also seek pecuniary penalties for a breach of section 50 of the CCA (see above).

If the merger parties fail to observe an informal clearance decision by the ACCC, the same action can be taken, albeit that the decision by the ACCC is not legally binding on the merger parties.

If a merger party fails to comply with a section 87B court undertaking, the ACCC can apply to the Federal Court for remedies (see above).

 
12. Is there a right of appeal against the regulator's decision and what is the applicable procedure? Are rights of appeal available to third parties or only the parties to the decision?

Rights of appeal

Informal processes. There is no right of appeal if the Australian Competition and Consumer Commission (ACCC) does not grant informal clearance. However, the merger parties can either:

  • Make an application to the Federal Court for a declaration that the merger will not breach section 50 of the Competition and Consumer Act 2010 (CCA).

  • Apply to the Tribunal for authorisation.

Formal processes. Parties can appeal an ACCC final determination under the formal clearance process within 14 days through a limited merits review. This is based only on the information before the ACCC. Only the applicant for clearance can appeal to the Tribunal. The Tribunal must make its decision either:

  • Within 30 business days.

  • Within an additional 60 business days if it considers the matter to be complex.

If the Tribunal refuses to grant an authorisation on public benefit grounds, a person aggrieved by the decision can apply to the Federal Court for review on administrative grounds.

Procedure

See above, Rights of appeal.

Third party rights of appeal

Third parties can apply to the Federal Court for a declaration under section 50, and can also seek orders for divestiture and civil damages.

 

Automatic clearance of restrictive provisions

13. If a merger is cleared, are any restrictive provisions in the agreements automatically cleared? If they are not automatically cleared, how are they regulated?

Restrictive provisions in agreements are not automatically cleared once the merger is cleared. Such provisions can be authorised by the Australian Competition and Consumer Commission (ACCC) but are otherwise subject to the applicable prohibitions in the Competition and Consumer Act 2010 (CCA).

There is an exception to certain prohibitions in the CCA, including the prohibition on cartel conduct, for a provision in a sale of business contract that is solely for the protection of the purchaser in respect of the goodwill of the business.

 

Regulation of specific industries

14. What industries (if any) are specifically regulated?

The merger control regime does not regulate specific industries. However, other legislative regimes regulate mergers in specific Australian industries. These include the financial, media and aviation sectors.

 
15. Has the regulatory authority in your jurisdiction issued guidelines or policy on its approach in analysing mergers in a specific industry?

The Australian Competition and Consumer Commission publishes separate merger guidelines for media mergers, a draft of which is currently subject to public consultation.

 

Joint ventures

16. How are joint ventures analysed under competition law?

Joint ventures (JVs) are subject to section 50 of the Competition and Consumer Act 2010 (CCA) if they involve acquisition of shares or assets (see Question 2). There is no special treatment for JVs under the merger control rules.

The CCA defines a JV as an activity in trade or commerce either:

  • Carried on jointly by two or more persons, whether or not in partnership.

  • Carried on by a body corporate formed by two or more persons for the purpose of enabling those persons to carry on that activity jointly by either:

    • means of their joint control of that body corporate; or

    • means of their ownership of shares in the capital of that body corporate.

 

Inter-agency co-operation

17. Does the regulatory authority in your jurisdiction co-operate with regulatory authorities in other jurisdictions in relation to merger investigations? If so, what is the legal basis for and extent of co-operation (in particular, in relation to the exchange of information, remedies/settlements)?

The Australian Competition and Consumer Commission co-operates with regulatory authorities in a number of jurisdictions including New Zealand, Canada, the EU, the UK, China, Taiwan, South Korea, Japan, Fiji, India, the Philippines, Papua New Guinea and the US. Co-operation generally extends to the exchange of information and co-operation and co-ordination of enforcement activities.

 

Recent mergers

18. What notable recent mergers or proposed mergers have been reviewed by the regulatory authority in your jurisdiction and why is it notable?

Sea Swift Pty Ltd's proposed acquisition of Toll Marine Logistics

On 1 July 2016, the Tribunal authorised Sea Swift Pty Ltd's (Sea Swift) acquisition of the marine freight business of Toll Marine Logistics (Toll) in Northern Territory (NT) and far north Queensland (FNQ), on the basis that the proposed acquisition produces a "net public benefit".

The decision is notable because one year earlier, the Australian Competition and Consumer Commission (ACCC) opposed the proposed acquisition under its informal clearance process (which does not consider public benefits). The ACCC concluded the transaction would be likely to "substantially lessen competition" in circumstances where Sea Swift and Toll were the two largest providers of marine freight services in the NT and FNQ and competition between them was beneficial for consumers.

The case is the second completed merger authorisation since the process was introduced in 2007 and the second positive determination for the parties (see AGL Energy case study below). The Tribunal completed the process within the three-month statutory period, thereby reinforcing that where public benefits can be demonstrated, merger authorisation can be an effective and relatively quick alternative route to securing competition clearance for a transaction.

Proposed acquisition of Asciano Ltd

On 21 July 2016, the ACCC decided not to oppose the proposed acquisition of Asciano Ltd (Asciano) by a consortium comprising Qube Holdings Ltd (Qube), Brookfield Infrastructure Partners LP (Brookfield) and a group of global investment funds.

The case (concerning the import-export supply chain for containerised freight through four key Australian ports) is notable because:

  • Initially Brookfield and Qube led separate consortiums. The ACCC's decision in relation to the former demonstrated that comprehensive behavioural undertakings are not sufficient to overcome competition concerns arising from foreclosure opportunities as a result of a vertical merger. The ACCC's consideration of the latter was suspended before a SOI was issued.

  • The parties were ultimately able to get the deal through by joining forces and seeking clearance for a restructured proposal. The proposal adequately addressed (by way of structural changes) competition concerns about the ability and incentive of Asciano's Patrick container terminals to discriminate in favour of Qube trains at one of the ports subject to the proposed acquistion.

CSR Ltd and Boral Ltd proposed clay bricks joint venture

On 18 December 2014, the ACCC decided not to oppose a proposed clay bricks joint venture (JV) between CSR Ltd (CSR) and Boral Ltd (Boral) on the basis of a failing firm defence under the informal public review process.

The ACCC considered that, in comparison to the status quo, the proposed JV would raise significant competition concerns. However, based on detailed information provided by Boral and other parties, the ACCC was satisfied that it was likely that Boral and its key assets would leave the relevant markets if the proposed JV did not proceed.

The decision affirms the ACCC's rigorous approach to testing failing firm claims. In relation to the decision, the ACCC stated that:

  • It viewed Boral's claims of failing firm defence with scepticism as often these claims are unsupported and are subsequently rejected.

  • It tested the claims made by conducting an extensive review of business records and the financial performance of Boral and examining two senior executives of the JV parties under oath. As a result, the ACCC concluded that there was sufficient evidence to support Boral's failing firm defence.

AGL Energy Ltd proposed acquisition of Macquarie Generation assets in New South Wales

In March 2014 the ACCC refused to grant informal clearance and opposed AGL Energy Ltd's (AGL) proposed acquisition of electricity generation plants owned by Macquarie Generation (Macquarie), a state-owned corporation. AGL then successfully applied to the Tribunal for authorisation of the proposed acquisition, despite strong opposition by the ACCC in its capacity as amicus curiae to the Tribunal.

In granting authorisation, the Tribunal found that the transaction gave rise to various public benefits, including benefits to the state's receipt of a sale price reflecting the assets' retention value, in circumstances where the Tribunal considered it was unlikely to obtain a commensurate price from another buyer.

The decision highlights the different results that can occur from applying different tests to the same facts.

 

Proposals for reform

19. Are there any proposals for reform concerning merger control?

On 31 March 2015 the Final Report of the Australian Government's Competition Policy Review (the Harper Review) was released. It made recommendations for Australia's existing competition law regime to promote more dynamic, competitive and well-functioning markets.

The Harper Review did not make any recommendations on the informal merger review processes, noting their flexibility and low cost, despite many submissions requesting more transparency and rigour. The panel recommended further consultations between the Australian Competition and Consumer Commission (ACCC) and business representatives to deliver more timely decisions.

The Harper Review recommended combining the rarely used formal ACCC merger clearance and Tribunal authorisation processes into a new formal approval mechanism, for complex and contested mergers. The review recommended the ACCC as the decision maker at first instance, with a right of appeal to the Tribunal. The ACCC and Tribunal would each be able to review the decision on the basis of the substantial lessening of competition test and/or the public benefit test. Specific features of the formal process will be settled in consultation with business, competition law practitioners and the ACCC.

In September 2016, the Federal Government commenced a consultation of an exposure Draft of the Competition and Consumer Amendment (Competition Policy Review) Bill 2016. It was the first step towards giving effect to the Harper Review recommendation to combine the formal processes. The ACCC will also consult with stakeholders to consider how the informal clearance process can deliver more timely decisions.

 

Online resources

Australian Government ComLaw

W www.comlaw.gov.au

Description. ComLaw is an Australian government website that contains the full official text of Australian Commonwealth government legislation, including the Competition and Consumer Act 2010. ComLaw is managed by the Office of Parliamentary Counsel.

Australian Competition and Consumer Commission (ACCC)

W www.accc.gov.au

Description. The ACCC website contains links to ACCC policy, including the Merger Guidelines (www.accc.gov.au/publications/merger-guidelines) and the Informal Merger Review Process Guidelines (www.accc.gov.au/publications/informal-merger-review-process-guidelines-2013). The ACCC website is managed by the ACCC.



The regulatory authority

Australian Competition and Consumer Commission (ACCC)

T +61 2 6243 1111
F +61 2 6243 1199
W www.accc.gov.au

Outline structure. The ACCC is an independent statutory authority with a chair, two deputy chairs, and a number of commissioners and associate members. The ACCC's divisions and groups include the following:

  • Merger and authorisation review.
  • Competition enforcement.
  • Consumer enforcement.
  • Consumer, small business and product safety.
  • Infrastructure regulation.
  • Australian energy regulator.
  • Legal and economic.
  • People and corporate services.

Responsibilities. The ACCC is responsible for:

  • Enforcing the Competition and Consumer Act 2010 and a range of additional legislation.
  • Promoting competition and fair trading.
  • Regulating national infrastructure for the benefit of all Australians.

Procedure for obtaining documents. There are a number of ways to obtain documents from the ACCC, including by accessing publicly available registers on the ACCC's website and applying for access to documents in the ACCC's possession under freedom of information laws. Certain documents filed in the Federal Court can also be accessed through court portals if proceedings have been instituted.

Australian Competition Tribunal

T +61 3 8600 3333
F +61 3 8600 3281
W www.competitiontribunal.gov.au

Outline structure. The Australian Competition Tribunal (Tribunal) is a statutory body consisting of a president, a number of deputy presidents and other members as appointed by the Governor‑General of Australia. A presidential member must be a judge of the Federal Court of Australia. Other members must have knowledge of or experience in industry, commerce, economics, law or public administration. For the purpose of hearing and determining proceedings, the Tribunal is constituted by a presidential member and two non-presidential members.

Responsibilities. In relation to company mergers and acquisitions, the Tribunal has a two-fold role. It hears applications for review of determinations of the ACCC granting or refusing clearances for company mergers and acquisitions. It also hears applications for authorisation of company mergers and acquisitions which would otherwise be prohibited under the Competition and Consumer Act 2010 (CCA).

Procedure for obtaining documents. There are a number of ways to obtain documents from the Tribunal, depending on the subject matter. They are determined by the CCA.



Contributor profiles

Michele Laidlaw, Competition Partner

Johnson Winter & Slattery

T +61 2 8274 9536
E michele.laidlaw@jws.com.au
W www.jws.com.au

Professional qualifications. Australia, 2001.

Areas of practice. Investigations and court proceedings in relation to competition law, including anti-competitive agreement cases, cartel prosecutions and restraint of trade cases; large scale commercial transactions and alliances requiring competition authority approvals in Australia and globally.

Recent transactions

  • Advising Bayer AG on the proposed acquisition of Monsanto.
  • Advising energy industry participants in relation to the ACCC's East Coast Gas Markets Inquiry.
  • Advising Qantas Airways Limited on a range of competition issues, including the ACCC prosecution of Jetstar (Qantas' low cost carrier) for drip pricing and in proceedings in respect of the international freight cartel.
  • Advising St Vincent's Hospital Australia and the Catholic Negotiating Alliance (largest alliance of not-for-profit health providers) on ACCC approvals for collective dealing with health insurers and a range of suppliers.
  • Advising Arrium on its sale of its OneSteel Sheet and Coil business to BlueScope.
  • Advising Prysmian in relation to ACCC proceedings alleging an electrical cable cartel and with respect to day-to-day competition issues.

Professional associations/memberships. Member, Law Council of Australia, Business Law section; Member, American Bar Association, Section of Antitrust Law.

Johanna Croser, Senior Associate

Johnson Winter & Slattery

T +61 2 8274 9606
E johanna.croser@jws.com.au
W www.jws.com.au

Professional qualifications. Australia, LLB 2009, PhD Economics 2010.

Areas of practice. Investigations and court proceedings in relation to competition law, including anti-competitive agreement cases, cartel prosecutions and restraint of trade cases; large scale commercial transactions and alliances requiring competition authority approvals in Australia and globally. 

Recent transactions

  • Advising energy industry participants in relation to the ACCC's East Coast Gas Markets Inquiry.

  • Advising Qantas on a range of competition issues, including obtaining anti-trust clearance across a number of jurisdictions in relation to the Jetstar Pan-Asia Strategy and the alliance with Emirates and advising on the ACCC prosecution of Jetstar (Qantas' low cost carrier) for drip pricing.

  • Advising Prysmian in relation to ACCC proceedings alleging an electrical cable cartel, and with respect to day-to-day competition issues.

  • Advising Australia's preeminent jockey clubs from trial to successful dismissal of leave to appeal to the High Court for anti-competitive conduct.

  • Advising Ramsay Health Care and ResMed on acquisitions and competition issues.


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