Merger laws: ACCC hasn’t made the case for shake-up of the merger regime

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The competition watchdog already has strong powers that it is using effectively to block and reshape deals. We are not convinced there is a crisis that demands a different regime.

As competition lawyers, we’re not known for forecasting the weather. But we suggest Australian deal makers invest in raincoats because dark clouds are gathering.in Melbourne show the regulator is prepared to play hard, taking a muscular approach to block mergers, especially in markets it believes are concentrated.

Given the lack of consensus that there is a problem to be solved, it should surprise no one that the ACCC’s proposed solution is also hotly contested. How would such a precautionary principle apply in practice to Australian merger law? The ACCC would apply it by reversing the current legal onus of the statutory test and by making the decision more discretionary.

Finally, there is the question of who marks the ACCC’s homework. It is true that the ACCC is blessed with a formidable set of legal minds. We’ve worked closely with them as colleagues in private practice over the years. But the quality of individual commissioners does not reduce the need for proper regulatory design.

On the whole, the ACCC oversees a successful and effective merger regime. Businesses and advisers understand the process and respect it. Over the past two decades, only a handful of mergers have had to be resolved by the courts or the tribunal.

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