New Regime Proposed to Give Competition Watchdog Final Say on All Mergers
Treasurer Jim Chalmers believes that the current voluntary merger regime is too inconsistent, and there is no way to ensure that the right mergers are being scrutinized. He is proposing a new law that would require companies to report their intentions for every corporate merger to the Australian Competition and Consumer Commission (ACCC).
Chalmers argues that the ACCC only evaluates about a quarter of all mergers under the current voluntary scheme, increasing the risk of missing anti-competitive combinations. Australia is one of only three OECD countries without a mandatory merger notification law, which Chalmers aims to change.
He emphasizes the need for a more competitive economy, stating that the proposed changes to the merger regime are the most significant in around 50 years. The goal is to enable good mergers to progress swiftly while subjecting concerning mergers to robust scrutiny.
Chalmers stresses that a competitive economy leads to more choices for consumers at fair prices, highlighting the importance of addressing the declining competitiveness observed in recent decades. The government’s investigations span various sectors, including supermarkets, where pricing practices have raised concerns amidst inflation challenges.
Under the proposed system, the ACCC would assess mergers based on whether they significantly reduce competition or consolidate power among market players. The reforms aim to simplify the process, enhance transparency, and expedite approvals for beneficial mergers while scrutinizing those that pose competition concerns.
The treasurer believes that the changes strike a balance between tougher rules sought by the ACCC and business concerns about excessive regulation. The updated merger laws will also address serial acquisitions, where a company acquires multiple smaller firms over time.
ACCC Chair Gina Cass-Gottlieb welcomes the proposed changes, noting that they will strengthen public confidence in Australia’s competition laws. If approved by Parliament, the new law is expected to take effect in 2026.
(AAP contributed to this story)
