ACCC welcomes merger rule changes

Treasurer Jim Chalmers MP has announced that the Albanese government will reform Australia’s merger rules to make it faster, stronger, simpler, more targeted, and more transparent.

The changes – which will commence on 1 January 2026 (subject to the passage of legislation) – aim to boost competition and productivity in the economy and will alter some of the Australian Competition and Consumer Commission’s (ACCC) powers.

Currently, Australia’s merger regime does not require merger parties to notify the ACCC of proposed acquisitions or to wait for ACCC clearance before proceeding. However, the new rules will prohibit merger transactions from proceeding without receiving a determination from the ACCC or Tribunal.

The changes also intend to make it easier for the majority of mergers to be approved quickly, so “the ACCC can focus on the minority that give rise to competition concerns”.

Among the main changes are:

• Mergers will need to be approved to proceed within 30 working days where the regulator decides they raise no competition concerns.
• The ACCC will review all mergers that pose a risk to competition, consumers, and the economy (not just those referred to them).
• Transactions that are “in the national interest” will be fast‑tracked.
• There will be a new “single expert decision‑making process” and a “single, streamlined path to approval” that removes duplication and standardises notification requirements for all mergers.
• A new law will be brought in to be notified to and determined by the ACCC if a merger is above monetary and market share thresholds (to be determined through consultation) in order to ensure acquisitions most likely to impact consumers are subject to “sufficient scrutiny”.
• A public register of all mergers and acquisitions will be created to promote transparency, accountability, and competition.
• The ACCC will be required to consider specific factors to better differentiate between “benign acquisitions and those that would entrench or extend market power”.
• All ACCC determinations will be subject to review by the Australian Competition Tribunal, ensuring reviews are conducted by legal and economic experts.
• Judicial review of Tribunal determinations will be available in the Federal Court.

Other updates include having the ACCC take into consideration the cumulative effect of mergers by the acquirer or target within the previous three years “to protect consumers from possible impacts of serial acquisitions in certain industries” and removing the “unnecessary regulatory duplication for businesses” by no longer requiring competition issues to be separately assessed under the Foreign Acquisitions and Takeovers Act of 1975.

‘We will simplify and speed up the process for mergers’

In a joint statement, Treasurer Chalmers and Andrew Leigh MP, the Assistant Minister for Competition, Charities, and Treasury and Assistant Minister for Employment, said: “Most mergers have genuine economic benefits – allowing businesses to achieve greater economies of scale and scope, helping them to access new resources, technology, and expertise.

“However, they can cause serious economic harm when firms are solely focused on squeezing out competitors to capture a larger percentage of the market.”

Treasury flagged that Australia’s competitiveness has been declining since the 2000s, while market concentration has nearly doubled since 2010.

“We will simplify and speed up the process for mergers that are in the national interest and give the regulator stronger powers to identify and scrutinise transactions that pose a risk to competition, consumers and the economy,” they said.

“Competition is a defining feature of our culture and we want to make it a more central, defining feature of our economy as well.

“Competition means more and higher quality choices for consumers, at fairer prices, it makes our businesses more dynamic, more innovative and more productive and expands our economy.

“Competition policy is a growth strategy and reforming our mergers system will benefit businesses as well as consumers and the broader economy.

“We want mergers to drive improvements in productivity, to put downward pressure on prices and to deliver more choice for Australians under the pump with the cost of living.

“These changes will deliver greater benefits to the economy and to consumers and provide certainty to businesses.”

The reforms came following the official Competition Review and consultation with the industry, plus taking advice from the Competition Taskforce expert advisory panel made up of David Gonski, Kerry Schott, John Asker, Sharon Henrick, John Fingleton, Danielle Wood, and Rod Sims.

They also followed on from the protracted ANZ-Suncorp merger decision, which was denied by the ACCC before being overturned by the Tribunal. The ACCC has opted not to appeal the Tribunal decision – clearing the way for ANZ and Suncorp to merge later this year (with completion expected around “mid-2024”).

Reacting to the announcement on Wednesday (10 April), the ACCC said it welcomed the move to strengthen Australia’s merger laws, which it said brought Australia into line with most other developed economies.

“We welcome the Treasurer’s announcement ... that the government will move to strengthen Australia’s merger laws, which will benefit Australian consumers and businesses of all sizes, as well as the wider economy,” ACCC chair Gina Cass-Gottlieb said.

“Higher prices, less choice and less innovation can result from weakened competition. Stronger merger laws are critical to ensure anti-competitive mergers do not proceed.

“These proposed changes are significant and will reinforce public confidence in Australia’s competition law.”

[Related: ACCC concerned about voluntary merger notification regime]