Response to Competition Review Merger Reform Consultation Paper
The Competition and Consumer Committee (the Committee) of the Business Law Section of the Law Council of Australia welcomes the opportunity to participate in the consultation being undertaken by the Competition Review (Taskforce) into Australia’s merger review processes.The Committee is also grateful for the opportunities that have been provided to members of the Committee to meet with the Taskforce directly to discuss the Taskforce consultation paper.
The submission focuses on three distinct aspects of the Taskforce consultation paper which the Committee considers most significant:
- Merger Test. Changes proposed by the ACCC and referred to by the Taskforce as “Option 3” in the consultation paper to reshape the substantive merger test as a “satisfaction” standard coupled with a negative onus of proof, which together fundamentally alter the orientation of the Australian merger clearance process.
- Review rights. The significant and adverse implications of removing a right for merger parties to seek declaration in the Federal Court for merger matters. Alternatives pointed to by the ACCC, including judicial review or the limited merits review process used currently in merger authorisations, have proven inadequate here and overseas and offer substantially less robustness and administrative accountability.
- Suggestions for practical reform. The Committee acknowledges that there are a number of practical improvements that could and should be made to the current Australian merger clearance processes. For the most part, these could be Competition Review Merger Reform Consultation Paper Page 1 undertaken quickly and without legislative amendment, in some cases through changes to ACCC practice or guidance.
While such improvements can (and should) be made, the Committee considers that the current model has proven over several decades to largely “strike the right balance”. Our merger clearance model supports flexible, robust and timely deal-making in Australia and has contributed to our economy remaining attractive to global capital. The Committee remains doubtful that the case has been made to shift the merger regime radically away from this approach to greater regulatory discretion and substantially reduced independent oversight—a shift that risks doing materially more harm than good.
Read the full submission below.