Australian Regulatory Trends 2019

9

MERGER PROPOSALS

WHAT SHOULD BUSINESSES BE DOING IN 2019?

Although there is no legal requirement to notify the ACCC of a merger, many companies still seek to confirm that the ACCC will not oppose a merger through the informal merger review process. The decisionby theACCC inMay 2019 to oppose the merger of TPG Telecom Limited and Vodafone Hutchinson Australia Pty Ltd on the basis that it would result in reduced competition and contestability, has put the ACCC’s approach to competition under close scrutiny. The parties involved are seeking review of this decision in the Federal Court of Australia. The decision appears to reflect an increasing focus by the ACCC on excessive consolidation in particular industries. There is a particular concern by the ACCC that acquisition of new entrants, who have the longer term potential to enhance competition in a sector may have far- reaching consequences.

In light of the active approach being taken by the ACCC to enforcement action for cartel behaviour and the potential for the ACCC to test the new misuse of market power provisions, business leaders should consider enhancements to their existing corporate capability for addressing and responding to competition law issues or face the risk of being prosecuted. The emergence of digital platforms and the presence of disrupters in almost every sector is already affecting the ACCC’s approach to regulation. Companies that are looking to operate in the digital space, or incumbents that are looking to acquire new players, need to be mindful of this shift in attitude in making business decisions.

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