In a recent speech provided to the Law Council of Australia Business Law Section's Competition and Consumer Workshop, the Chairman of the Australian Competition and Consumer Commission (ACCC), Rod Sims, confirmed that the ACCC will be putting forward ideas for changes to Australia's merger laws in 2021.
This statement of the ACCC's intentions came in the context of an address by Mr. Sims which highlighted the ACCC's continued monitoring of anti-trust efforts around the world which focused on major digital platforms, including, in particular, the US Department of Justice's recent case against Google and the proposed new competition regulations in Europe.
Although it remains to be seen what precise form these proposed changes will take, it is likely that they will be based on the ACCC's recommendation from its final report in the landmark Digital Platforms Inquiry, in which it recommended, amongst other things, amendments to section 50(3) of the Competition and Consumer Act 2010 (Cth), which forms part of Australia's merger control regime (and sets out the matters that must be taken into account in determining whether an acquisition is likely to lessen competition), to include two additional merger factors:
- the likelihood that the acquisition would result in the removal from the market of a potential competitor; and
- the nature and significance of assets, including data and technology being required.
These proposed amendments would require the merger parties (and the ultimate decision-maker) to positively address the 'significance' of data and technology assets being acquired, and would highlight to merger parties and the courts (as well as the Australian Competition Tribunal) the importance of these factors in their merger review considerations.
In his speech, Mr. Sims noted that Australia's existing merger laws were not sufficiently strict or robust enough to effectively regulate the increasing dominance of tech giants, such as Google and Facebook, in the new digital economy. He also pointed to the fact that the ACCC had not been successful in a contested merger case since 1992, at which time the relevant test was whether the merger would result in, or substantially strengthen, a position to control or dominate a market, as opposed to the current substantially lessening of competition test (which is considered to be a more relaxed test than the previous one).
In late 2019, the Australian Government published its response to the ACCC's Final Report, in which it committed to commence a consultation process on these amendments to Australia's merger laws proposed by the ACCC in its Final Report. According to the Australian Government, these reforms would deliver a regulatory framework that is 'fit for purpose' and better promotes competition in the digital age. The Australian Government initially indicated that it would commence its consultations on these proposed amendments in 2020, but the outbreak of COVID-19 has delayed this aspect of its regulatory reform agenda to 2021.
For more information please contact Thomas Jones or Tom Macken.