It seeks to align Australia with the larger offshore jurisdictions and allow time for the ACCC to make information and decisions of the same standard as antitrust agencies considering the same transactions in other markets.
In discussing why the system needs to be reformed, the ACCC gave several examples of it not working. Port owner Qube Holdings said he only gave three weeks’ notice of his intention to acquire the Newcastle Agri Terminal and would not delay the completion date. By the time the ACCC finished judging, the horse was bolted.
Another example is global gantry crane suppliers Cargotec and Konecranes, which did not notify the ACCC of their planned merger. Concerned about the impact on competition, regulators needed to know about it from customers.
Ultimately, mandatory notice takes away some of the power of attorneys (Cass-Gottlieb’s former rivals and colleagues) who handle the ACCC’s informal merger review process on behalf of their clients. (Informal review is the most common way to seek ACCC approval.)
The process is very flexible. A submission can be 10 or 100 pages and typically outlines the merging parties and defines their market and competitive dynamics. The ACCC will review that information as part of its review.
The ACCC believes that the merging parties (and their attorneys) are increasingly determining which parts of the structure will be involved.
Lawyers are unsure, pointing out that the ACCC has already passed approval for the merger and no further work is needed. Authorities have investigated 463 mergers in the last financial year, more than the number notified to the European Commission in 2022.
Change brings uncertainty
“I think our structure at this point is flexible, respected and well understood,” said Jacqueline Downes, Allens partner and head of competition, consumer and regulatory affairs. .
“Australia has a habit of constantly changing competition laws as they pertain to business.
“The concept of significantly reducing competition is well known. There’s been a lot of judicial deliberations about it, and I think it should be the norm. I don’t think the law needs to change, and it should. Neither should.”
king & Wayne Leach, a partner at Wood Mallesons, said there is good reason the ACCC is often not the first regulator to learn about a deal, especially when Australia represents only a tiny fraction of the global deal. thinking about.
“It is important that the ACCC can assess mergers that affect Australia,” he said.
“But the reality is that in these big global deals, where Europe and the US are much bigger markets, we often work on European filings first, work out what the facts are, then customize. It is really necessary to get a lawyer for the application to deal with your country’s problems.
“In some cases, this could mean starting negotiations for a remedy in Europe or the US first before approaching other regulators.”
Changes to the enforcement model have also been proposed, requiring that transactions should be allowed for competitive reasons, rather than regulators proving why potentially anti-competitive transactions should not occur. It places the burden of proof on the acquirer who must prove it.
It will be interesting to look at the reforms in more detail to see exactly how far Cass-Gottlieb wants to go.
The proposed changes were announced in a 5.5 page speech to the National Press Club, leaving many questions unanswered. For example, non-conflict transactions are processed quickly, but what is a non-conflict transaction?
Ultimately, the spirit of change is less about addressing the underlying problems of Australia’s integrated (and integrated) industry and market power than it is about catching processes and outliers or long-standing troublemakers. Seemed to be focused.
Little impact on reforms with Suncorp clients worried about ANZ Bank’s proposed takeover and Victorian power market players worried about Brookfield adding Origin Energy to growing stability It looked like
Little seemed to suggest a change in the ACCC’s record against large-scale mergers, including Tatts/Tabcorp, TPG/Vodafone and AGL Energy/Macquarie Generation, which were all dismissed in Australian competition courts. .
The overwhelming question was whether reform was necessary.
At the very least, regulators want a little more time and better service around merger reviews, a blow over the legal industry’s bow. Perhaps Cass-Gottlieb saw the light.