The Australian Competition and Consumer Commission’s Proposed Merger Reforms

The Australian Competition and Consumer Commission has recently outlined proposed changes to Australia's merger clearance law and process. This paper analyses the ACCC's proposals. We conclude that:1. Overall, the current merger clearance process in Australia works very well. However, the ACCC should clarify the ‘rules’ for the current informal clearance process, with clear pathways to the existing formal clearance processes if merger parties are uncooperative or attempt to game the process. In contrast, the ACCC’s proposed alternative clearance process will remove the desirable cost/benefit option and will create business uncertainty through the call-in power, while reducing ACCC accountability.2. The approach to the meaning of ‘likely’ in the s.50 test and the approach to ‘counterfactual analysis’ in Australia are both confused. The precedent set by the courts in New Zealand and embedded in the Commerce Commission’s merger guidelines provides clear workable alternatives. Australia should adopt the New Zealand approach. The ACCC’s recommendations do not do this. The ACCC’s proposed ‘deeming’ of certain mergers risks focussing analysis away from competitive effects and onto ambiguous debates about market power.3. Overall, rather than leading the debate and reform through its merger guidelines and cases, the ACCC has fallen back on seeking legislative reform. Unfortunately, the ACCC’s proposals appear to be an ‘ambit claim’ that will likely set back legitimate reform