Merger Control 2024 Comparisons

The relevant merger control legislation in Australia is found in the Competition and Consumer Act 2010 (Cth) (CCA). Section 50 of the CCA prohibits the acquisition of shares or assets that would have the effect, or likely effect, of substantially lessening competition in a market in Australia.

The Australian Competition and Consumer Commission (ACCC), the independent government agency responsible for enforcing the CCA in Australia, has published a range of guidance materials relevant to Australia’s merger control regime, which includes:

• the ACCC Merger Guidelines 2008 (“Merger Guidelines”);
• the ACCC Informal Merger Review Process Guidelines 2013 (“Informal Review Guidelines”);
• the ACCC Merger Authorisation Guidelines 2017;
• the ACCC Media Merger Guidelines 2017; and
• the ACCC Use of Section 155 Powers.

There are additional approval requirements for acquisitions in the banking and financial services sector. Special rules in the Broadcasting Services Act 1992 (Cth) governing acquisitions in the media sector were abolished in 2017. Accordingly, acquisitions in the media sector are subject to the foreign investment rules and Section 50 of the CCA. The ACCC Media Merger Guidelines 2017 supplement the ACCC’s Merger Guidelines by drawing out key areas of focus for the ACCC when assessing mergers in the media sector.

The relevant legislation for foreign transactions and investments is outlined in 9.1 Legislation and Filing Requirements.

Enforcement by the ACCC

The ACCC is the regulator that enforces and administers Australia’s merger control regime under the CCA. The ACCC has sole standing to enforce Section 50.

In Australia, it is not currently mandatory to notify transactions to the ACCC. However, parties regularly notify transactions that fall within the thresholds set by the ACCC in its Merger Guidelines on a voluntary basis for the purpose of obtaining comfort that the ACCC will not intervene to seek an injunction to block the transaction. The ACCC is also free to review any transaction it wishes, including transactions that are not notified.

If the ACCC opposes a transaction because it considers that the transaction would be likely to have the effect of substantially lessening competition in contravention of Section 50, the decision is not binding. However, the ACCC may enforce the decision by applying to the Federal Court of Australia (FCA) for a range of remedies. These include:

• injunctions preventing companies from completing transactions;
• forced divestiture following a merger or orders to unwind the transaction;
• compensation for customers or competitors; and
• penalties per contravention for companies of up to the greater of AUD50 million or three times the value of the benefit obtained if it can be determined (if the benefit cannot be determined, 30% of turnover during the breach period), and up to AUD2.5 million for individuals.

The ACCC has no independent powers to seek to prevent mergers without a court order.

In practice, if the ACCC opposes a transaction, it will generally request an undertaking that the parties will not complete. If the parties refuse to give such an undertaking, the ACCC may seek an injunction to prevent the transaction proceeding.

The ACCC is also the body that has the power to authorise a transaction, which gives the transaction statutory immunity from action under Section 50.

Enforcement by the Foreign Investment Review Board (FIRB)

FIRB enforces the foreign investment rules. The impact on competition is a relevant factor when FIRB is considering the impact that a foreign investment proposal would have on the national interest. As a matter of practice, FIRB consults with the ACCC on the competition impacts of the foreign investment proposal and FIRB will not grant approval until the ACCC confirms it has no competition concerns.

Voluntary Notification Regime

In April 2024, the Australian government announced its proposed economy-wide merger control reforms that would replace the existing voluntary regime and its options for clearance (including informal merger review and merger authorisation) with a mandatory and suspensory regime. See 10.1 Recent Changes or Impending Legislation for more information on those proposed reforms.

Until the reforms commence on 1 January 2026, Australia continues to have a voluntary merger notification regime. However, in practice, parties regularly notify the ACCC of transactions in Australia where there are horizontal or vertical overlaps.

Guidance thresholds

The ACCC’s Informal Review Guidelines encourage notification of a merger where:

• the products of the merger parties are either substitutes or complements; and
• the merged firm will have a post-merger market share of more than 20% in the relevant market(s).

Section 50(6) of the CCA defines a market as a market for goods or services in Australia, a state or territory of Australia, or a region of Australia.

Although parties may proceed with a transaction without notifying the ACCC, in practice the ACCC expects to be notified of transactions that meet the above thresholds. Further, if the transaction requires FIRB approval under the foreign investment rules, FIRB will not approve the transaction until the ACCC has confirmed it has no competition concerns. Therefore, practically speaking, ACCC engagement becomes mandatory. The ACCC can also review any transactions it wishes to, even if not notified by the parties.

Industries of interest

The ACCC also encourages parties to notify transactions within certain industries. For example, the ACCC may identify specific industries of interest in its compliance and enforcement priorities for the upcoming year, and in the course of inquiries it conducts on the direction of the Australian government.

In 2024, the ACCC’s priorities include competition and consumer issues arising in relation to:

• essential services (with a focus on telecommunications, electricity, gas and financial services);
• the supermarket sector;
• the aviation sector;
• environment and sustainability; and
• digital platforms and the digital economy.

In recent years, the ACCC has shown particular interest in mergers in the health industry, financial services, telecommunications industries, and in acquisitions by large digital platform services. See 10.3 Current Competition Concerns for further detail.

Informal Merger Clearance

Currently, parties may seek informal merger clearance from the ACCC for a proposed transaction. Informal clearance does not provide statutory immunity. However, parties who receive clearance will obtain a letter of comfort from the ACCC that it will not take further action in relation to the transaction, provided no material facts later come to light of which the ACCC was not aware. Sections 3.5 Information Included in a Filing and 3.8 Review Process provide further explanation of the informal merger clearance processes. The vast majority of mergers in Australia are assessed under the informal merger clearance process, which remains the most flexible, convenient and relatively effective process for obtaining ACCC approval in Australia.

As outlined in 10.1 Recent Changes or Impending Legislation, the new merger regime that commences on 1 January 2026 will convert this voluntary process to a mandatory and suspensory process. The ACCC will be the first instance, administrative decision maker. If the ACCC does not raise competition concerns or does not make a decision within 30 working days, the merger will be permitted to proceed, with the option of “fast-track” determination if no concerns are identified after 15 working days. Where competition concerns are raised, the ACCC will undertake an in-depth “Phase II” assessment to be completed within a four-and-a-half-month period.

Merger Authorisations

It is also possible for parties to seek merger authorisation from the ACCC. This provides the parties with statutory immunity from any court action taken under Section 50 of the CCA. 3. Procedure: Notification to Clearance provides further explanation on the merger authorisation process.

Penalties for Failing to Notify the ACCC

As it is currently not mandatory to notify the ACCC of transactions, there are no penalties for not notifying. However, even if parties do not notify a transaction to the ACCC, the ACCC can (and does) investigate transactions that it becomes aware of through other avenues (eg, complaints from market participants, FIRB, other Australian or international regulators, or the media). In these circumstances, the ACCC may take an aggressive approach to investigating the transaction, including issuing statutory notices. If it has serious preliminary concerns about the transaction, it may approach the court for an injunction to prevent completion.

Penalties for Failing to Notify FIRB

There are civil and criminal penalties for failing to notify FIRB if a transaction is caught by thresholds under the foreign investment rules. A foreign person who takes a notifiable action without having first notified FIRB or takes a “significant action” prior to obtaining the treasurer’s approval can be subject to the following.

Criminal penalties

For individuals, the penalty is up to ten years՚ imprisonment or a fine of up to 15,000 penalty units (AUD4.695 million). For corporations, the penalty is up to 150,000 penalty units (AUD46.95 million).

Civil penalties

The penalty amount is the lesser of either:

• 2,500,000 penalty units (AUD782.5 million); or
• the greater of: 5,000 penalty units (AUD1.565 million) for individuals (or 50,000 penalty units (AUD15.65 million) if the person is a corporation); or an amount determined by reference to the value for the action.

Section 50 of the CCA applies to all direct and indirect acquisitions within Australia of shares and/or assets, including:

• purchases of legal or equitable interests in assets, membership interests and trust units;
• acquisitions by way of purchase, exchange, lease, hire or hire purchase; and
• joint acquisitions.

The ACCC Merger Guidelines state that Section 50 does not apply to asset acquisitions by way of a charge or in the ordinary course of business. A mere internal restructuring will not give rise to a need to file if the acquisitions of shares are all between related bodies corporate as there would be no lessening of competition.

There is no statutory threshold based on “control”. However, any acquisition of shares and/or assets that raises competition concerns may be investigated by the ACCC.

In practice, the ACCC is most interested in acquisitions that result in a change in control. The ACCC’s Merger Guidelines indicate that the ACCC treats the acquisition of a controlling interest in a company in the same way as the acquisition of all the company’s shares. In most cases, a majority shareholding would deliver control of a company, but minority shareholdings with or without other interests may also be sufficient. Relevant factors include the ownership distribution of the remaining shares and distribution of voting rights.

However, the ACCC is increasingly focussing on minority interests in the context of common fund management and ownership among competing firms.

There are currently no jurisdictional thresholds for the ACCC reviewing a transaction and it is not mandatory to notify, but the ACCC encourages parties to notify transactions that meet its guidance thresholds (see 2.1 Notification).

Section 50 of the CCA prohibits acquisitions that have the effect or likely effect of substantially lessening of competition in a market in Australia, which may include a global market that includes Australia.

Under Section 50A, the CCA applies to foreign-to-foreign acquisitions of a controlling interest in a body corporate where that body corporate has a controlling interest in a corporation. If the transaction would not otherwise fall within Section 50, the ACCC may approach the Australian Competition Tribunal to declare that the transaction has the effect or is likely to have the effect of substantially lessening competition in a market. Section 50A was designed to apply to offshore acquisitions where the acquirer is not incorporated (or a registered foreign corporation) in Australia and does not carry on business in Australia, but which would impact competition in a market in Australia. To date, Section 50A has not been invoked by the ACCC.

There are currently no jurisdictional thresholds because it is not mandatory to notify the ACCC. However, the ACCC encourages notification where a potential transaction meets certain thresholds, which is based on the merger parties’ combined shares in the relevant market(s) (see 2.9 Market Share Jurisdictional Threshold).

Generally, the ACCC considers shares based on the merger parties’ revenues and/or sales volumes in at least three recent years, but it can also consider other measures of shares as appropriate.

When assessing whether a transaction falls within the ACCC’s guidance thresholds, both the acquirer’s and the target’s shares (including any shares of their related bodies corporate) should be included in the share calculation.

A related body corporate is defined in Section 50 of the Corporations Act 2001 (Cth) to mean that where a body corporate is a holding company of another body corporate, a subsidiary of another body corporate, or a subsidiary of a holding company of another body corporate, the first-mentioned body and the other body are related to each other.

The ACCC requires information regarding the parties and their related bodies corporate to undertake the informal merger review and merger authorisation processes. To the extent there are any changes to the acquirer’s or the target’s businesses that may impact on share calculations after the ACCC has been notified of the transaction, it would be prudent to update the ACCC with this information.

As explained in 2.5 Jurisdictional Thresholds, the merger control regime under the CCA applies to foreign-to-foreign acquisitions where the parties’ activities include Australia, such that there could be an anticompetitive effect in Australia (eg, if there are Australian customers or businesses that could be affected).

As explained in 2.1 Notification, while it is currently not mandatory to notify the ACCC, the ACCC expects to be notified of a merger where:

• the products of the merger parties are either substitutes or complements; and
• the merged firm will have a post-merger market share of more than 20% in the relevant market(s).

Consequently, it is possible for transactions that do not include any overlaps (ie, parties do not supply substitutable products) to be captured (eg, because the parties supply complementary products and one party has 20% or more share in their product).

Section 50 of the CCA applies to joint ventures if they involve the acquisition of shares and/or assets (see 2.3 Types of Transactions).

Joint ventures may also be subject to other provisions of the CCA that relate to restrictive trade practices, such as the provisions regulating cartel conduct (which can attract civil and criminal penalties) or contracts, arrangements or understandings that have the purpose or likely effect of substantially lessening competition (which can attract civil penalties). Exemptions to these provisions may apply if a joint venture meets certain criteria. Alternatively, parties may apply to the ACCC for authorisation of a joint venture for statutory immunity against breaching these provisions.

The ACCC can investigate any transaction involving the acquisition of shares and/or assets. It may do so by:

• requesting information or documents to be provided on a voluntary basis; and/or
• exercising powers under Section 155 of the CCA to obtain information, documents and evidence on a mandatory basis (see 3.10 Requests for Information During the Review Process).

The ACCC can also apply to the FCA for an injunction preventing completion of the transaction or a remedy more broadly (see 1.3 Enforcement Authorities).

As notification is voluntary, transactions are not required to be suspended until ACCC clearance is granted. However, the ACCC may in some circumstances ask parties to provide an undertaking not to complete a transaction until the ACCC has finished its review (eg, in circumstances where the transaction is not conditional on ACCC clearance and the ACCC has preliminary concerns). In addition, the ACCC may apply to the FCA for an interim injunction to prevent completion.

However, if FIRB approval is required, then the merger parties cannot complete until FIRB approval is obtained, which means that the ACCC clearance process is pseudo-suspensory (see 2.1 Notification).

Further, merger parties seeking merger authorisation must give an undertaking under Section 87B of the CCA not to complete the transaction while the ACCC is considering the authorisation application.

There are no statutory penalties for completing a transaction without ACCC clearance. However:

• if the parties have given the ACCC a court-enforceable undertaking not to complete the transaction until the ACCC has completed its review, then completion may result in a court order directing compliance, penalties amounting to the financial benefit that can be reasonably attributed to the breach, or compensation; and
• the ACCC can also apply to the FCA for an injunction to prevent completion of the transaction.

The ACCC may apply to the FCA for a range of remedies post-completion if it considers that the transaction contravenes Section 50, including penalties and orders to unwind the transaction (see 1.3 Enforcement Authorities).

There are also civil and criminal penalties for implementing a transaction without FIRB approval if a transaction is caught by the foreign investment rules (see 2.2 Failure to Notify).

As noted in 2.12 Requirement for Clearance Before Implementation, the ACCC has no power to suspend completion of a transaction.

However, if parties have given an undertaking not to complete until the ACCC has completed its review, then the parties will need to seek ACCC consent to withdraw or vary the undertaking.

In practice, even where no undertaking not to complete has been provided to the ACCC, parties rarely complete a transaction that they have notified to the ACCC prior to the ACCC completing its review, including because of the regulator’s ability to seek an injunction from the FCA to prevent completion. In 2021, the ACCC successfully obtained an interlocutory injunction from the FCA to prevent completion of Virtus Health’s acquisition of Adora Fertility (Virtus/Adora) after the parties indicated they intended to complete notwithstanding that the ACCC had not completed its review.

In limited circumstances, it may be possible for the parties to negotiate with the ACCC to allow completion to occur subject to a hold separate undertaking while the ACCC completes its review.

As the Australian merger control regime is currently non-suspensory (see 2.12 Requirement for Clearance Before Implementation), merger parties are not prohibited from completing a transaction before it is cleared by the ACCC. However, as explained in 2.14 Exceptions to Suspensive Effect, if parties have given a court enforceable undertaking not to complete until the ACCC has completed its review, then it must seek permission from the ACCC to vary the undertaking before the transaction can complete before clearance or authorisation. Though rare, there is a risk that the ACCC would apply to the FCA to seek an injunction to prevent completion (see 1.3 Enforcement Authorities). In 2021, the ACCC successfully obtained its first interlocutory injunction from the FCA, preventing completion of the acquisition of Adora Fertility by Virtus Health pending a final determination on the merits, in circumstances where the ACCC review was ongoing. This was the ACCC’s first such injunction since 1994, but its decision to engage in the court process to signals its strong attitude towards parties completing transactions before it can complete its review.

If the parties have yet to receive ACCC clearance or authorisation, but wish to close the transaction, it may be possible for the parties to negotiate with the ACCC to allow completion to occur subject to a hold separate undertaking while the ACCC completes its review. For example, while the ACCC reviewed its acquisition of Atwood Investment Holdings, Dometic Group provided an undertaking to hold a subsidiary of the target company separate until the ACCC completed its review in 2015 so that the rest of the global transaction could close in the interim.

In respect of its proposed acquisition of Adora Fertility in 2021, Virtus offered the ACCC a temporary hold separate undertaking proposal under which Virtus would acquire Adora but would commit to take some steps to keep the Adora business separate from the Virtus business. The ACCC considered there were no compelling reasons other than commercial convenience for the transaction to proceed and that the proposed undertaking was inadequate and unlikely to have been effective in maintaining Adora as a vigorous and effective competitor. Instead, the ACCC sought an urgent injunction to restrain competition of the proposed transaction.

There is no prohibition against completion before the ACCC completes its review unless the parties have given an undertaking not to complete the transaction until that time. In the merger authorisation context, the acquirer must give an undertaking to not complete the proposed acquisition while it is under review.

If the parties complete, merger authorisation is no longer an option as the ACCC cannot authorise completed acquisitions.

As notification is voluntary, there is no deadline or applicable penalties.

However, if parties have a condition precedent requiring ACCC clearance and a global timetable for completion, they should be mindful of filing early enough to provide the ACCC sufficient time to review.

In 2022, ACCC chairperson Gina Cass-Gottlieb expressed the ACCC’s concern that merger parties often notify the ACCC later than other jurisdictions due to the absence of a mandatory notification requirement in Australia, which may slow down the global merger clearance process given the need to independently review the transaction. In April 2023, this concern was referred to when the ACCC outlined its proposal to make Australia’s merger regime mandatory and suspensory for meeting certain financial or economic thresholds.

On 10 April 2024, the government released its proposed reforms for merger control in Australia, which included the introduction of a mandatory and suspensory notification regime and prohibition on mergers above a threshold proceeding without approval by the ACCC or Australian Competition Tribunal. Exposure draft legislation is slated to follow later in 2024. It is proposed that the new merger control process will be in place and apply from 1 January 2026.

Section 10.1 Recent Change or Impending Legislation explains these proposed reforms in greater detail.

There is no requirement that parties have a binding agreement before applying for ACCC clearance under the informal clearance process. Indeed, in some cases, a seller may require bidders in an auction process to obtain clearance before the seller will accept an offer. However, the ACCC will not consider a hypothetical transaction.

There are currently no filing fees under the informal merger clearance process.

A merger authorisation application requires a AUD25,000 filing fee. There is also an AUD25,000 fee for lodging an application for revocation and substitution of a merger authorisation. However, no fee applies for applications for minor variation or applications to revoke an existing authorisation.

Primary liability for a breach of Section 50 falls on the acquirer, as the acquirer is typically responsible for filing in Australia. However, the seller will bear ancillary liability so will be closely involved in the process.

However, in the course of assessing a transaction, the ACCC can seek information from any party. In particular, the ACCC may seek information or exercise statutory powers to compel the production of information or documents, or to give evidence (see 2.11 Power of Authorities to Investigate a Transaction).

Information Required for Informal Clearance Filing

There is no form for filing through the informal clearance process. However, the ACCC Informal Review Guidelines indicate that the ACCC requires initial information including:

• information about the parties, including their Australian business operations, interests and assets;
• details of the transaction; and
• information regarding market shares, imports and new entry and expansion in relevant markets.

For mergers which the ACCC considers require a public review, the ACCC will typically ask for a list of key customers and/or supplier contact details.

Information Required for Merger Authorisation Application

To apply for merger authorisation, parties need to provide the ACCC with:

• a public version of their application;
• a signed declaration that the information in the application is true, correct and complete;
• a Section 87B undertaking not to complete the transaction while the ACCC is considering the application; and
• the AUD25,000 lodgement fee.

The merger authorisation application requires information including:

• information about the parties;
• details of the transaction;
• transaction documents, including the sale and purchase agreement;
• documents relating to the applicant’s decision to acquire the target firm;
• information on the relevant markets;
• the effect of the transaction on competition; and
• public benefits and detriments likely to result from the transaction.

Invalid Notification Under the Informal Clearance Process

There are no penalties for an invalid notification under the informal clearance process. However, failure to provide relevant information upfront could cause delays to the clearance process, and if material facts later come to light that would have been relevant to the ACCC’s review, it may decide to reopen the investigation.

Invalid Notification Under the Merger Authorisation Process

The ACCC must assess the validity of a merger authorisation application within five business days of receipt.

If it considers that an application is invalid, no penalties apply. However, the ACCC will notify the applicant within the five-business day period and, in most cases, will provide the applicant with an opportunity to rectify and re-submit the application (with no additional fee, provided the AUD25,000 lodgement fee was paid initially).

If the ACCC becomes aware that the merger authorisation application was invalid after the initial five-business day period, it will raise this with the applicant.

Knowingly giving false or misleading information to the ACCC is a serious criminal offence under Section 137 of the Criminal Code (Cth).

In the context of a merger authorisation application, it is an offence under Section 92 of the CCA for a person to give information to the ACCC in connection with a merger authorisation application if the person knows, or is reckless or otherwise negligent, as to whether the information given is false or misleading. Pecuniary penalties apply for breaches of Section 92.

Penalties also apply for refusal or failure to comply with a Section 155 notice (such as giving evidence which is false or misleading) in the course of the ACCC carrying out its assessment of the transaction.

The ACCC’s clearance letter will state that it does not intend to take further action in relation to the transaction. The letter will contain a standard form caveat that if the ACCC becomes aware of new information or that information it received during the review process is incorrect or incomplete, it may reconsider its decision.

Informal Clearance Timeline

The informal clearance process may involve the following processes.

• Pre-assessment – when parties notify the ACCC of a transaction (or the ACCC otherwise becomes aware of it, eg, through FIRB consultation), the ACCC conducts a “pre-assessment” of the transaction. This is done confidentially and relying on information provided by the parties or otherwise publicly available, rather than conducting public market inquiries. In some cases, if the transaction is not confidential, the ACCC may conduct targeted inquiries (eg, with a selected number of customers and/or suppliers, without publishing the matter more broadly on its website). At the end of the pre-assessment process, the ACCC may decide to clear the transaction or go to public review (or a confidential review, if the transaction is not yet announced). The ACCC’s Informal Merger Guidelines indicate that it typically takes two weeks for pre-assessment. However, in practice, a substantive pre-assessment may take around six to eight weeks.
• Public review – if the matter goes to public review, the ACCC will publish a market inquiries letter on its website and seek submissions from interested parties. The letter will contain a brief description of the transaction and a set of questions for submissions to address. The ACCC will also publish an indicative timeline, which will include a “provisional decision date” for the end of its first phase of review. The ACCC’s indicative timing for public review is six to 12 weeks from concluding the pre-assessment phase. On the provisional decision date, the ACCC may decide to either clear the transaction or publish a “Statement of Issues” (SOI) (ie, move to a second phase review).
• SOI – if the ACCC has preliminary competition concerns following market feedback and this has not been resolved during phase one, it will publish an SOI, which sets out the issues that the ACCC are “likely” to be of concern (“red lights”) and issues that “may” be of concern (“amber lights”). The ACCC will also establish a secondary timeline. Parties may need to address the matters raised in the SOI with additional submissions and information. The ACCC’s indicative timing for this stage is six to 12 weeks after publication of the SOI.

The duration of the above stages of informal merger clearance varies from case to case, depending on the complexity of the issues and/or the degree of complaints received from market participants. The ACCC may also suspend its published timeline (ie, “stop the clock”) if parties do not meet the ACCC’s timeframes for responding to voluntary or statutory information/document requests. The ACCC may also “stop the clock” if parties offer a remedy during the review process and the ACCC requires additional time to consider the proposal, including to test the proposal with relevant market participants.

The overall time period for a highly complex merger is typically in the vicinity of six to eight months (accounting for clock stoppages).

Under the proposed merger reforms, merger parties must notify the ACCC if a transaction meets certain thresholds. The actual thresholds have yet to be determined, but they will likely be based on monetary (such as turnover or transaction value) and share of supply. Further, to respond to concerns regarding creeping acquisitions, all mergers undertaken by either party within the previous three years will be aggregated for the purposes of assessing whether a merger meets the notification thresholds. Notably, the Government will not give the ACCC the power to “call-in” mergers that fall below the thresholds, although the ACCC may still investigate such mergers for potential breaches of other parts of the CCA.

Under the current regime, the ACCC must apply to the Federal Court to block a merger and prove that the transaction would have the effect or likely effect of substantially lessening competition.

Merger Authorisation Timeline

Under the merger authorisation process, the ACCC is subject to statutory timeframes. The timing certainty afforded by the merger authorisation process is considered to be one of the benefits of the process over informal clearance.

The ACCC has 90 calendar days to make a decision regarding a merger authorisation, starting from the day the ACCC receives a valid application.

If the ACCC does not make a decision within this time, it is deemed to have refused the application. However, the 90-day time limit can be extended with the consent of the merger parties in writing prior to the expiration of the 90 days.

Practically, merger authorisation gives the parties more certainty as to timing. However, while the ACCC has generally been diligent in complying with statutory timeframes in other authorisation processes (ie, authorisation of contracts, arrangements or understandings that may be cartel conduct or may have the purpose, effect or likely effect of substantially lessening competition), in recent years it has typically taken more than 90 days to complete its merger authorisation processes.

On average in 2023, informal merger clearance took around 234 calendar days. In contrast, since the current merger authorisation regime was introduced in 2017, the ACCC has obtained consents to extend the timeline in each of the merger authorisation reviews it has conducted, resulting in an average total review time of 173 calendar days:

• the review of ANZ’s proposed acquisition of Suncorp Bank (ANZ/Suncorp) took 245 days, with a total of 90 days of extension;
• Brookfield LP and MidOcean’s proposed acquisition of Origin Energy Limited took 127 days to review, with a total of 37 days of extension;
• the review of the merger of Linfox Armaguard and Prosegur Australia (Armaguard/Prosegur) took 259 days, making it the longest merger authorisation process to date, with a total of 170 days of extension;
• Telstra Corporation Limited and TPG Telecom Limited’s proposed spectrum sharing arrangement (Telstra/TPG) is the longest merger authorisation review completed by the ACCC to date, taking 212 days in total and involving 122 days of extension (followed by around six months on appeal, as outlined below);
• the proposed amalgamation of BPAY, eftpos and the New Payments Platform Australia took 171 days in total to consider, ie, 81 days of extension; and
• Gumtree’s proposed acquisition of Cox Australia Media Solutions took 107 days to review, ie, 17 days of extension.

An appeal of an ACCC decision to deny an application for merger authorisation to the Competition Tribunal would also require additional time, as was the case in:

• ANZ/Suncorp Bank ‒ the parties filed their appeal on 25 August 2023 and the Tribunal set aside the ACCC’s decision not to grant authorisation on 20 February 2024; and
• Telstra/TPG ‒ the parties filed their appeal in December 2022, the matter proceeded to hearing in April 2023, and the Tribunal affirmed the ACCC’s decision not to grant authorisation on 21 June 2023.

Parties can engage in pre-notification discussions with the ACCC before initiating the informal clearance or merger authorisation processes.

Discussion With the ACCC Before Initiating an Informal Clearance Process

Parties may wish to approach the ACCC for a briefing and/or discussions prior to initiating the informal clearance process. Whether this is appropriate will vary from case to case (eg, if the transaction is significant and/or concerns a sector the ACCC is unlikely to be familiar with, it may be helpful to arrange a “briefing in” session). However, the ACCC is unlikely to give any indication of whether the transaction raises any concerns prior to reviewing the filing, although the ACCC may ask questions and give the parties a better indication of the type of information that the ACCC would consider helpful in its assessment. For more straightforward cases, there is unlikely to be any utility in seeking pre-notification discussions with the ACCC.

Discussion With the ACCC Before a Merger Authorisation Application

The ACCC strongly encourages potential merger authorisation applicants to contact the ACCC for an informal discussion before lodging their application. During such discussions:

• the applicant will have the opportunity to discuss their application and ensure that it is valid and contains adequate information; and
• the ACCC can indicate the issues that the applicant should address in their application, though the ACCC cannot provide its views on the likely outcome.

The ACCC also recommends that the applicant provide a draft application to the ACCC prior to the discussion, which will be kept confidential and will not be placed on the public register.

Types of Information Requests

For both the informal clearance and merger authorisation processes, the ACCC may:

• issue voluntary information and/or document requests to the merger parties or third parties before or during its review; and/or
• use its statutory information-gathering powers under Section 155 of the CCA (Section 155 notice) to compel the furnishing of information, production of documents and/or summon officers to provide oral evidence.

The nature of the voluntary requests and/or Section 155 notices depends on many factors, including the extent of overlaps, whether an affected market or sector is one that the ACCC is focused on, and whether the ACCC is aware of complaints from market participants about the transaction.

For Section 155 notices, the ACCC may provide a draft notice for the parties to comment on prior to serving the notice. A recent amendment has made it clear that the ACCC can serve a Section 155 on persons overseas.

If documents are withheld from a response to a Section 155(1)(b) notice on the basis of legal professional privilege, reasons must be provided for each privilege claim. This process broadly aligns with the subpoena process and the approach taken by other corporate regulators in Australia such as the Australian Securities and Investments Commission.

Impact on Review Timeframe

For both the informal clearance and merger authorisation processes, the clock generally does not stop if the parties respond within the requested timeframes. However, if the parties delay in providing information, the ACCC may delay its review timeline.

A merger authorisation process may also be delayed if the ACCC needs to obtain or review extensive material (eg, a large volume of documents). As noted in 3.8 Review Process, the ACCC needs the parties’ consent to extend the timeline.

Under the ACCC’s informal clearance process, it is possible for parties to obtain clearance under the pre-assessment phase. This is usually possible for transactions that are not complex and/or where there are clearly no substantial competition concerns (eg, because there are very minimal overlaps). The ACCC’s guidance indicates that pre-assessment could take around two weeks (although in practice, a substantive pre-assessment may take six to eight weeks).

To avoid delays in the informal clearance or merger authorisation processes, parties should engage proactively with the ACCC on competition issues (especially if they are raised by overseas regulators), as this can reduce or prevent information requests, and respond to information requests on time.

The substantive test under Section 50 of the CCA is whether the transaction would have the effect or likely effect of substantially lessening competition.

Section 50(3) contains a non-exhaustive list of “merger factors” that the courts have to take into account (and which the ACCC will also take into account) when reviewing a transaction. The courts and the ACCC may also consider any other relevant factors, as set out below.

• Import competition: the degree of actual or potential direct competition from imported goods or services, including whether the supply of imports can respond to competitive signals in a timely and sufficient manner.
• Barriers to entry: the likelihood of timely and sufficient entry and expansion in relevant markets post-transaction. The ACCC will more likely have competition concerns where significant barriers exist. However, a transaction need not increase barriers to entry for it to be considered anti-competitive by the ACCC.
• Concentration and market shares: the extent to which the transaction will increase market concentration, including through considering the market shares of the merging parties and their competitors, and whether current market shares are likely to reflect future market share patterns.
• Countervailing power: the degree to which customers have countervailing power, which can weigh against the merged entity’s market power. Countervailing power exists when buyers have special characteristics that enable them to credibly threaten to bypass the merged firm (eg, through vertical integration and/or sponsoring new entry).
• Ability to increase prices or profit margins: the extent to which the transaction will give the merged entity a greater ability to significantly and sustainably increase prices or profit margins, as this may also indicate that the transaction is likely to give rise to a substantial lessening of competition or result in public detriments that outweigh public benefits. However, the ACCC recognises that increased profitability is not in itself a conclusive indicator of a substantial lessening of competition.
• Substitutes: whether substitutes are available and the degree to which they impose sufficient constraint on the merged entity, having regard to how closely the merger parties compete with each other and other market participants, and the ability of rivals to expand. This assessment is related to identifying the relevant product market(s) (see 4.2 Markets Affected by a Transaction).
• Dynamic characteristics of the market: the degree and extent of any change to the nature of the market in the future. Dynamic changes may result from a range of factors including market growth, innovation, product differentiation and technological changes.
• Removal of a vigorous and effective competitor: vigorous and effective competitors can drive significant aspects of competition, such as pricing, innovation or product development, even though their own market share may be modest. Therefore, if a transaction involves acquiring a vigorous and effective competitor or a "maverick", the ACCC will be more likely to consider that the transaction raises competition concerns.
• Vertical integration: if a merger involves both horizontal and vertical competition issues (for example, because one or more of the merger parties operate at more than one level of the supply chain or each of them operates at a different level), the ACCC will assess the merger based on the combined potential horizontal and vertical impacts on competition.

Where parties seek merger authorisation from the ACCC, then the ACCC (or the Australian Competition Tribunal, if a review is sought) may only grant authorisation if it is positively satisfied that the proposed merger would either (i) not be likely to have the effect of substantially lessening competition; or (ii) would be likely to result in public benefits that would outweigh the public detriments that would likely result from the proposed merger. 

In April 2023, ACCC chairperson Gina Cass-Gottlieb outlined the ACCC’s recommendations for legislative changes to expand the substantive test and introduce additional merger factors as part of a suite of economy-wide merger control reforms. In April 2024, the Australian government announced its proposed reforms for merger control in Australia, which included the introduction of a mandatory and suspensory notification regime and prohibition on mergers above a threshold proceeding without approval by the ACCC or Australian Competition Tribunal. At the time of writing, no draft legislation has been released for consultation.

Under the proposed regime, the ACCC must allow a merger to proceed unless the ACCC reasonably believes that the merger would have the effect or likely effect of substantially lessening competition. This test looks likely to be modified to include an express reference to considering whether a transaction “strengthens or entrenches a position of substantial market power”. This reflects a shift towards a more structural approach. 

More information on these recommendations is provided at 10.1 Recent Developments or Impending Legislation.

Section 50(6) of the CCA defines “market” as a market for goods or services in Australia, a state or territory of Australia, or a region of Australia.

The ACCC defines markets based on the products and geographic areas that are supplied, or potentially supplied, by the merger parties. It typically focuses on the overlaps between the merger parties in the products and areas supplied, and on their close substitutes.

In relation to substitution, the ACCC is concerned with:

• demand-side substitution, which involves consideration of the likely customer switching behaviour in response to an increase in price, or a decrease in service or quality; and
• supply-side substitution, which involves consideration of behaviour in response.

The ACCC may request and take into account the following information to identify a close product substitute:

• the function, end use, and characteristics of the product;
• cost of switching, and evidence of switching; and
• changes in the product price compared to that of potential substitutes.

In identifying close substitutes of the relevant geographic area, the ACCC may consider:

• the portability of the product (which may depend on its perishability or weight);
• transportation costs;
• the ease, cost or difficulties associated with obtaining the product from alternative regions; and
• changes in price between different geographic sources of supply.

While the ACCC in practice will have regard to Australian and overseas case law and/or its previous decisions or decisions by other regulators, it is not bound by them.

However, if the ACCC brings court proceedings, then the court will have regard to, and be bound (as appropriate) by Australian case law (as would the Competition Tribunal, if parties appeal an ACCC decision to deny a merger authorisation application to the Tribunal).

As discussed in 4.1 Substantive Test, the ACCC will have regard to the merger factors set out in Section 50(3) of the CCA, in addition to other factors it considers relevant to the assessment of whether a transaction will have the effect or likely effect of substantially lessening competition.

The potential theories of harm to competition that the ACCC will assess are set out in the ACCC’s Merger Review Guidelines.

Unilateral Effects

The ACCC will consider whether the transaction will give rise to or increase the likelihood of unilateral effects, which is when competitive constraints are weakened or removed such that the merged firm’s unilateral market power increases post-merger. A merged firm’s unilateral market power may increase if it has the ability and incentive to raise prices, reduce output or otherwise exercise market power it has gained.

Co-ordinated Effects

The ACCC will also consider whether a transaction will give rise to or increase the likelihood of co-ordinated effects in terms of whether it would assist firms in the market to co-ordinate their pricing, output or related commercial decisions.

This may occur if a merger:

• reduces the number of firms among which to co-ordinate;
• removes or weakens competitive constraints; or
• alters the market conditions that make co-ordination more likely.

Vertical Effects

The ACCC will consider the effect on competition of a merger between firms at different levels of a vertical supply chain where the upstream firm supplies an input to the downstream firm’s production process. It will consider whether the vertically integrated merged firm would have the ability and incentive to foreclose rivals, for example by:

• charging downstream rivals higher prices for an important input;
• limiting or denying downstream rivals from accessing an important input;
• limiting or denying upstream rivals from accessing customers; and/or
• charging upstream rivals’ higher prices for accessing customers.

Conglomerate or Portfolio Effects

The ACCC will consider whether conglomerate mergers between firms that interact across related product markets will enable the merged firm to foreclose rivals and reduce competition by bundling or tying products across a portfolio. Typically, a conglomerate firm would be able to do if it has sufficient market power in at least one functional level of the vertical supply chain or in one of the related markets.

Informal Merger Clearance

In the informal merger clearance process, the ACCC does not consider economic efficiencies as part of the substantive test under Section 50 of the CCA of whether the transaction would have the effect or likely effect of substantially lessening competition, unless the parties are able to demonstrate the efficiency gain is likely to have an impact on competition (eg, by being passed on to consumers in the form of lower pricing).

Merger Authorisation

However, one of the advantages of the merger authorisation process is that the ACCC can grant authorisation if it is satisfied that the transaction:

• would not be likely to have the effect of substantially lessening competition; or
• is likely to result in a net public benefit (ie, the likely public benefit resulting from the transaction outweighs the likely resulting public detriment).

Accordingly, the ACCC (and the Tribunal, on review) may consider economic efficiencies under the merger authorisation process. Merger parties may wish to consider merger authorisation (rather than informal merger clearance) in circumstances where the transaction may be perceived to raise competition issues but would also give rise to material public benefit.

Court Action

Economic efficiencies are not relevant if the ACCC brings court action in relation to a transaction that it considers has contravened Section 50 of the CCA.

Under the government’s proposed merger reforms, merger parties may, following the ACCC’s Phase II determination, seek approval from the ACCC on the basis that the merger would result, or be likely to result, in a substantial benefit to the public which outweighs the anti-competitive detriment of the merger.

The ACCC does not consider non-competition issues as part of the informal merger clearance process.

However, in the merger authorisation process the ACCC will assess whether the transaction is likely to result in a net public benefit, which can include consideration of non-competition public benefits.

The ACCC considers joint ventures caught by Section 50 the same way that it does other acquisitions.

The ACCC’s Merger Guidelines note that joint acquisitions of assets by rivals may have co-ordinated effects (see 4.4 Competition Concerns). For example, two competitors in a market may participate in a joint venture in another market, which may result in co-ordinated effects in the first market.

The ACCC does not currently have independent powers to suspend or prevent parties from completing a transaction. However, as explained in 1.3 Enforcement Authorities, if the ACCC has serious competition concerns with a transaction, and the parties choose to proceed with the transaction without ACCC approval (or notwithstanding ACCC issuing an oppose decision), the ACCC may apply to the FCA for remedies, which include seeking an injunction to prevent completion and/or or an order to divest or unwind following completion.

As explained in 2.1 Notification, if the transaction requires FIRB approval, notification to the ACCC is pseudo-mandatory and suspensory, because FIRB consults with the ACCC regarding any competition concerns and will not approve the proposed foreign investment until it has received confirmation there are no such concerns from the ACCC.

As explained further in 10.1 Recent Changes or Impending Legislation, the government has proposed a mandatory and suspensory merger control regime that would automatically suspend the completion of transactions over certain thresholds until ACCC approval has been granted. The proposed regulatory framework would not give the ACCC “call-in” powers to review potentially problematic proposed acquisitions that fall below the threshold, although the ACCC could still investigate such mergers for potential breaches of different parts of the CCA.

Section 87B Undertakings

The ACCC has the power to accept court enforceable undertakings under Section 87B of the CCA as a means of remedying competition concerns that may arise from mergers. While it is possible to offer both behavioural and structural undertakings (or a combination of both), the ACCC has expressed that it considers behavioural undertakings are unlikely to sufficiently remedy any competition concerns it may have with a transaction (see 5.4 Typical Remedies).

Commitments to the FCA

Outside of the ACCC process, it is also possible for parties to offer commitments directly to the FCA during court proceedings; if such undertakings are accepted by the FCA, the ACCC may also accept an 87B undertaking to assist in the monitoring and enforcement of the undertakings accepted by the FCA.

Parties may offer any remedies, and there is no legal standard that remedies must meet. However, the ACCC has discretion over whether to accept a remedy. Its Merger Review Guidelines indicate it has a strong preference for structural undertakings (ie, divestitures) over behavioural undertakings, as it considers structural remedies tend to be more straightforward to administer, monitor and enforce.

Further, the ACCC typically prefers remedies to be offered in its standard Section 87B undertaking form, which is provided in its Section 87B Undertakings Guidelines.

As the ACCC prefers structural undertakings over behavioural undertakings, it accepts the former more frequently.

Between 2022 and April 2024, the ACCC conducted informal clearance reviews of 48 mergers and accepted undertakings in nine, all structural in nature (noting that the divestiture undertaking accepted in the Dye & Durham/Link Administration transaction was later withdrawn when the transaction did not proceed).

In the merger authorisation context, the ACCC did not accept any of the undertakings offered in Telstra/TPG – all of which were behavioural. However, it did accept a behavioural undertaking when it approved the Brookfield LP and MidOcean proposed acquisition of Origin Energy Limited and Armaguard/Prosegur merger (see below for more detail).

Structural Undertakings

The ACCC Merger Guidelines indicate that, generally, a structural undertaking requires all of the following in order to be acceptable to the ACCC:

• a divestiture remedy that is proportionate to the competition concerns and effective in restoring or maintain competition;
• sale of the assets to a viable, effective and long-term competitor;
• procedures for the purchaser to be approved by the ACCC;
• preservation of the value and integrity of the divestiture package, pending divestiture;
• appropriate provisions which would apply if the firms fail in their core obligations;
• appropriate provisions to enable ACCC monitoring, investigation and enforcement (if necessary) to ensure compliance with the undertakings; and
• implementation within a timely manner.

Behavioural Undertakings

The ACCC Merger Guidelines indicate that behavioural undertakings are generally only appropriate if they foster the development or maintenance of effective competitive constraints in the short term. Permanent or long-term behavioural undertakings are rare.

Recent behavioural remedies accepted by the ACCC in a merger review context include the following.

• In October 2023, the ACCC conditionally approved the application for merger authorisation in relation to the proposed acquisition by Brookfield and MidOcean of Origin (although the transaction subsequently fell over in December 2023). The applicants provided a draft ring-fencing undertaking offered by three Brookfield entities, a prohibition on Brookfield selling AusNet and Origin in the future in a manner that would result in a single corporate group holding more than a 10% interest in both, and independent audits and reporting requirements.
• The 2023 behavioural undertaking relating to the Armaguard/Prosegur merger, which includes a range of obligations which are intended to provide continuation of services, reduce uncertainty about price and service levels and provide opportunities for other cash-in-transit providers to make use of excess equipment to expand their existing operations. The undertaking will be effective for three years.
• The 2021 behavioural undertaking from Australian Payments Plus in connection with its acquisition of shares in BPAY, eftpos and New Payments Platform Australia. The undertaking includes obligations on Australian Payments Plus to ensure the parties will supply prescribed services, explore and make available certain services, and to agree an industry-wide standard.
• The 2019 undertaking relating to ANZ Terminals’ acquisition of GrainCorp Liquid Terminals Australia, which had both structural and behavioural elements. This undertaking required the parties to divest a terminal and ANZ Terminals to not lease further land in a specified area without ACCC consent.
• The 2018 undertakings relating to the acquisition of the majority interest in the WestConnex project by Sydney Transport Partners (a consortium led by Transurban). These include obligations on Transurban requiring it to publish important traffic data to ensure that the transaction would not lessen competition for future toll roads.

The ACCC did not accept any of the undertakings (all behavioural) offered by the parties in Telstra/TPG. It also rejected the long-term behavioural undertaking offered by Google in 2020 in relation to its proposed acquisition of Fitbit (Google/Fitbit), which it ultimately completed in 2021 without waiting for ACCC clearance. Under the undertaking, Google offered to behave in certain ways towards rival wearable manufacturers, not use health data for advertising and, in some circumstances, allow competing businesses access to health and fitness data. Though the European Commission accepted a similar undertaking from Google, the ACCC was not satisfied that such a long-term behavioural undertaking could be effectively monitored and enforced in Australia.

Also in 2020, the ACCC considered a behavioural undertaking offered by Woolworths in relation to its acquisition of a 65% shareholding of PFD Food Services. Though the ACCC received feedback from public consultations that the undertaking would not be effective, it ultimately considered that it was unnecessary as the acquisition was unlikely to substantially lessen competition.

When to Offer a Section 87B Undertaking

Merger parties can propose an 87B undertaking at any stage of the informal clearance or formal merger authorisation processes.

Although undertakings may be offered upfront, they are more frequently offered after the ACCC has expressed its preliminary concerns to address those concerns. The ACCC will usually conduct public consultation with interested parties on the effectiveness of proposed Section 87B undertakings, which may delay its review.

How to Offer a Section 87B Undertaking

The merger party (usually the acquirer) must offer an 87B undertaking based on the ACCC’s standard form. The ACCC does not accept changes to the majority of the operational provisions and any amendments must be explained in a submission.

After receiving the offer, the ACCC typically conducts public market inquiries (which can be targeted) with interested parties to test whether the proposed remedy is adequate to address competition concerns raised by the potential transaction, and the level of composition, purchaser and asset deterioration risk associated with the proposed divestiture package. The ACCC will then raise the market feedback with the merger parties and may suggest amendments to the proposed 87B undertaking to address any issues. The ACCC typically allows for two to three weeks to conduct these inquiries.

Generally, the ACCC prefers upfront buyers. However, if there is no upfront buyer, the merger parties will generally need to persuade the ACCC that there will likely be sufficient parties interested in purchasing the divested business, and that asset deterioration is unlikely.

In December 2023, the ACCC accepted a divestment remedy from Petstock without an upfront buyer in relation to Woolworths’ proposed acquisition of a 55% controlling interest, as well as a court-enforceable undertaking from Woolworths to support the Petstock divestiture. Petstock undertook to divest a package of sites and assets, including 41 retail stores to a purchaser to be approved by the ACCC.

Informal Clearance Decisions

For transactions that are cleared in pre-assessment phase, the ACCC will provide the parties with a letter indicating it does not intend to conduct a public review (effectively a clearance letter), but the ACCC’s decision will not be published on its website.

If a transaction is “cleared”, after a public review the ACCC will publish a brief outline of its decision on the ACCC website, and provide the parties with a letter indicating it does not intend to oppose. This will typically involve a short summary of its reasons and a media release.

In some cases, the ACCC will publish a public competition assessment (PCA) that outlines in more detail the basis for reaching its final conclusion. The ACCC will typically publish a PCA if:

• a merger is cleared and raises important issues that the ACCC considers should be made public;
• a merger is rejected;
• a merger is subject to enforceable undertakings; or
• the merger parties seek such disclosure.

The ACCC aims to publish PCAs within 30 business days of making a decision, but this may be longer in complex matters. It will also provide a letter to the parties stating it does not intend to take further action regarding the transaction.

Merger Authorisation Decisions

The ACCC may grant merger authorisation without conditions, grant authorisation subject to conditions (usually this will take the form of a condition to give and comply with a Section 87B undertaking), or deny authorisation.

The ACCC must provide its decision and reasons to the applicant in writing. It will also publish the decision on its public register.

A clearance decision will cover related arrangements that are legitimately part of the transaction, as the ACCC will assess whether the acquisition, including the arrangements, substantially lessens competition compared to the world without the acquisition and arrangements.

Any arrangement which is not legitimately related to the transaction will not be covered by the ACCC’s review and the parties may need to seek separate authorisation if the arrangement would otherwise breach other CCA provisions, such as the prohibitions on cartel conduct or other contracts, arrangements and understandings that have the purpose, or are likely to have the effect, of substantially lessening competition. 

In the merger authorisation context, the ACT’s decision in Telstra and TPG (No. 2) [2023] ACompT 2 raised some uncertainty about whether merger authorisation is available for transactions that involve both an acquisition and other ancillary commercial arrangements, or whether parties should apply for general authorisation for both the merger and non-merger aspects of the transaction. In Telstra Corporation’s and TPG Telecom’s application for merger authorisation to enter into three interrelated agreements to facilitate mobile infrastructure and spectrum sharing in certain regional and urban fringe areas of Australia, the parties submitted that the three agreements were commercially and legally interdependent and therefore the effects of the three agreements to be considered as a whole. However, the ACT decided it could only have regard to the impacts arising from the agreement under which TPG authorised Telstra to use its spectrum, deciding that the other two agreements relating to sharing access were “coincident with, but not causally related to” the conduct that was subject to the merger authorisation application.

The ACCC may reach out to third parties such as customers and competitors of the merger parties as part of its assessment of a transaction in both the informal clearance and merger authorisation processes (see 7.2 Contacting Third Parties).

Any party may contact the ACCC to voice concerns about a transaction, including in response to a market inquiries letter or to make a complaint even if the transaction has not been notified. Third parties may make submissions and provide information and/or other supporting evidence.

For merger authorisations, third parties can make submissions to the ACCC, which are published on its register.

While the ACCC is the only entity able to obtain an injunction for a potential breach of Section 50 of the CCA, other parties may seek other remedies, including declarations and damages, and the ACCC may request third parties to give evidence in any proceedings.

Informal Clearance Process

In the pre-assessment stage, the ACCC may conduct limited targeted inquiries if the transaction is not confidential. It will typically ask parties to provide contact details (eg, of a selection of customers) and the ACCC will reach out to them individually for telephone calls.

During a public review, the ACCC will conduct public market inquiries by publishing a market inquiries letter on its public register to ask interested parties to make submissions. The ACCC will also typically reach out directly to the merger parties’ key customers. If an SOI is published, the ACCC will also invite interested parties to make submissions on the issues raised.

The ACCC may seek the views of third parties on not only the transaction but also to test any remedies offered by the merger parties.

Merger Authorisation Process

The ACCC’s merger authorisation process is public. The ACCC will publish a market inquiries letter on its website (along with copies of the applicant’s submission and supporting documents) and ask interested parties to make submissions.

Confidentiality Under the Informal Clearance Process

During the pre-assessment stage of the informal clearance process, the ACCC does not publish information regarding the transaction. However, if it decides to commence public review, it will place non-confidential information regarding the transaction on the public register. The ACCC provides merger parties with an opportunity to make confidentiality claims over information published on the register (such as the market inquiries letter).

The ACCC does not publish submissions it receives in the course of the informal clearance process. However, the ACCC will provide the merger parties with an anonymised summary of the feedback it receives during market inquiries.

Confidentiality Under the Merger Authorisation Process

The ACCC publishes merger authorisation applications on its public register. However, the merger parties can claim confidentiality over and request exclusion of material in the application from publication and provide the ACCC with a redacted version of the application for publication. As the merger authorisation process is public, the ACCC may test the breadth of confidentiality claims made by the applicant and/or third parties providing submissions.

Confidentiality Generally

Under both the informal clearance and merger authorisation processes, the parties may claim confidentiality over information and documents provided to the ACCC. The ACCC accepts confidentiality information on its usual terms (which relate to the ACCC’s use of the information and disclosure to external advisers, consultants and third parties) (see Section 2.43 of the ACCC Informal Merger Guidelines and Section 5.9 of the ACCC Merger Authorisation Guidelines for details).

The ACCC, being party to a number of co-operation agreements with international competition and consumer agencies and governments, co-operates closely with regulators in a number of jurisdictions. These include:

• the United Kingdom’s Competition and Markets Authority;
• the United States Federal Trade Commission and Department of Justice;
• the New Zealand Competition Commission;
• the European Commission;
• the Canadian Competition Bureau;
• the State Administration for Market Regulation of China;
• the Competition Commission of India; and
• the Fair Trade Commission of the Republic of Korea.

The ACCC chairperson Gina Cass-Gottlieb has highlighted the importance of the ACCC’s close co-operation with overseas competition agencies, identifying digital platforms, mergers, anti-competitive conduct in global supply chains and financial services as key areas of critical international co-operation.

The ACCC may consult with other regulators regarding a transaction. Where discussions do not involve protected information (such as commercially sensitive or confidential information), the ACCC may do so without seeking permission from the merger parties.

However, where the ACCC wishes to share or seek confidential information, then it must seek confidentiality waivers from the parties (ie, permission to disclose or receive the information). The ACCC will typically ask parties to sign its standard form waiver for most transactions that are being considered by overseas competition regulators.

Appealing Informal Clearance Decisions

There is currently no right to appeal the ACCC’s decision not to grant informal clearance. However, merger authorisation may be sought at any time during the informal clearance process or after the ACCC announces its decision to oppose the transaction.

Further, if the parties object to the ACCC’s opposition to the transaction, they can seek a declaration from the FCA that the transaction does not breach Section 50. For example, after the ACCC opposed the merger of TPG Telecommunication and Vodafone Hutchison Australia, the FCA declared in 2020 that the merger would not substantially lessen competition.

Even if the ACCC decides to oppose a transaction under the informal clearance process, the parties are not prohibited from completing the transaction. However, such a decision is a strong signal that the ACCC will initiate court action to prevent completion.

Under the proposed merger reforms commencing on 1 January 2026, merger parties or third parties (subject to having standing) may apply for limited merits review of ACCC determinations by the Tribunal. Parties and third parties may then apply for judicial review of the Tribunal’s decision (but not the ACCC’s determination) in the Federal Court. During limited merits review, the Tribunal may make a determination affirming, setting aside or varying the ACCC’s determination and, for the purposes of the review, may perform all the functions and exercise all the powers of the ACCC.

The government’s proposal indicates that the Tribunal’s review will be limited to the material before the ACCC. While the Tribunal may seek “clarifying information”, and the Tribunal may allow the parties to present new information or evidence which was not in existence at the time of the ACCC’s determination. The government considers that limited merits review, rather than full merits review, appropriately balances procedural fairness by allowing for a change of circumstances to be taken into account and ensures merger parties have the incentive to place relevant information before the ACCC. It remains to be seen whether and how the limited merits review under the new regime will differ from the limited merits review available to parties currently in the merger authorisation process.

Alternatively, a fast-track review by the Tribunal may be sought, based only on the material before the ACCC. In these circumstances, the Tribunal would be bound by the findings of fact made by the ACCC.

Appealing Merger Authorisation Decisions

Merger authorisation decisions of the ACCC are subject to review via two avenues.

ACCC merger authorisation decisions are reviewed by the Australian Competition Tribunal under a process that is also governed by strict timelines (90 days to make its decision, extended to 120 days if new information is admitted).

The Tribunal will make its decision based upon the materials that were before the ACCC, but it has the discretion to allow or request further evidence that was in existence at the time of the ACCC’s decision or to address new circumstances. While the Tribunal has discretion to request further evidence clarifying the materials that were before the ACCC, this does not extend to evidence testing the reliability or credibility of that material.

Parties can seek judicial review of ACCC merger authorisation decisions in the Federal Court, but only on questions of law. The Full Federal Court can review the Tribunal’s determinations regarding appeals of ACCC merger authorisation decisions, though also only on questions of law.

As mentioned in 8.1 Access to Appeal and Judicial Review, the appeal of a merger authorisation decision is governed by a strict timeline of 90 days that may be extended to 120 days.

Since the Harper Reforms, Telstra/TPG is the first merger authorisation decision to be appealed to the Australian Competition Tribunal. The parties filed their appeal in December 2022 and the matter proceeded to hearing in April 2023. On 21 June 2023, the Tribunal affirmed the ACCC’s decision not to grant authorisation. ANZ/Suncorp Bank was the second merger authorisation decision to be appealed to the Australian Competition Tribunal. The parties filed their appeal in August 2023 and on 20 February 2024, the Tribunal set aside the ACCC’s decision not to grant authorisation.

Third parties do not have a right to seek an injunction for a breach of Section 50 but may seek other remedies, as noted at 7.1 Third-Party Rights.

Third parties may apply to the Australian Competition Tribunal for a review of an ACCC merger authorisation decision. However, they must explain their interest in the decision.

The relevant legislation and associated regulations for foreign transactions and investments in Australia (the foreign investment rules) govern the review of foreign investment proposals, including requiring certain foreign investments that meet the relevant criteria to seek approval from the Australian Treasurer. The Treasurer may block proposals that are contrary to the national interest (or national security, as applicable), or apply conditions to ensure a proposal is not contrary to the national interest (or national security, as applicable). The Treasurer’s power to approve foreign investments is administered through FIRB.

Foreign investors who meet the notification criteria must submit an application for a “no objection notification” or an “exemption certificate” to FIRB, depending on what better suits their circumstances.

A foreign person who takes a notifiable action without having first notified FIRB or takes a “significant action” prior to obtaining the Treasurer’s approval can be subject to significant civil and criminal penalties, set out at 2.2 Failure to Notify.

Merger Authorisation

The ACCC’s current power to grant merger authorisation was the result of legislative reform in 2017. Merger authorisation was previously the responsibility of the Australian Competition Tribunal.

ACCC’s Merger Reform Proposals

In April 2023, the ACCC chairperson Gina Cass-Gottlieb outlined the ACCC’s economy-wide merger reform proposals. The reforms would change both the procedure of merger notification and review, as well as the substantive legal test as to whether a merger is anti-competitive.

The Australian Government’s Merger Reform Proposals

The key aspects of the government’s merger reforms, as announced in April 2024 and which are due to apply from 1 January, are as follows.

• Mandatory notification regime and prohibition on mergers above a threshold cannot proceed without approval: the reforms convert Australia’s merger process from a voluntary regime to a mandatory and suspensory process. Merger parties will be prevented from completing a transaction unless they have notified the ACCC and the deal has been cleared. All mergers within the previous three years by the acquirer or the target will be aggregated for the purposes of assessing whether a merger meets the notification thresholds. The government said this is a targeted measure to address concerns that some businesses are engaging in serial or creeping acquisitions or anti-competitive roll up strategies that increase prices and reduce quality and choice for consumers.
• Decision maker and timeframes: the ACCC will be the first instance administrative decision maker. If the ACCC does not raise competition concerns or does not make a decision within 30 working days, the merger will be permitted to proceed, with the option of “fast-track” determination if no concerns are identified after 15 working days. Where competition concerns are raised, the ACCC will undertake an in-depth “Phase II” assessment to be completed within a four-and-a-half-month period. Parties may apply for ACCCC determination on substantial public benefits grounds or seek Tribunal review at this stage. The government provided an indicative review timeline of 50 working days but noted this is subject to Treasury consultation in 2024.
• Clearance as an administrative decision and removal of the Federal Court: critically, the Treasury intends for the process to have a greater focus on economic analysis and consideration of market structure, with less emphasis on evidentiary issues. A merger may proceed unless the ACCC “reasonably believes” it would have the effect or likely effect of substantially lessening competition. Parties will no longer have any ability to challenge the merits of an ACCC decision before the Federal Court. Instead, parties will be entitled to apply for limited merits review before the Competition Tribunal. This will restrict parties to a review that is substantially “on the papers” limited to the material that had been put before the ACCC.
• Transparency: the government has indicated that the ACCC will be required to publish reasons for its decisions, together with any findings of fact. The ACCC does not look likely to be required to disclose the underlying evidence or data on which its decisions were based, or to expose this material to challenge. In that sense, the process appears to provide incrementally more transparency than the current informal clearance process, but significantly less than currently exists before the Federal Court or in the Competition Tribunal.
• Merger notification thresholds: the thresholds are still to be developed but will involve both monetary values (such as sales revenue, profitability or transaction value) as well as market share measures. The thresholds will be set with an objective that the ACCC will continue to assess approximately 300 mergers each year, consistent with the current process. 
• Role of market power and other structural factors in the competition test and merger factors: the competition test would be expanded to expressly include consideration of “market position”, that is, a business’ economic and financial power, and whether a merger is likely to strengthen or entrench a position of substantial market power. This is consistent with a general move under the reforms towards emphasis on market structure in the analysis of mergers. The merger factors would also be expanded to include a number of structural considerations.

The Treasury will consult on the above later this year with exposure draft legislation to implement the reforms expected toward the end of 2024. In parallel, the ACCC will consult on a range of issues raised by the changes, including merger notification thresholds, procedural safeguards, specific fees and exemptions. In 2025, the ACCC will consult on the form of notification.

Recent ACCC Review Record

The ACCC conducted public reviews of 16 transactions through its informal merger review process in 2023. During this process:

• the ACCC opposed four transactions: Qantas/Alliance Airlines; Woolworths/SUPA IGA Karabar; Transurban Group/Horizon Roads Pty Ltd; Australian Clinical Labs Limited/Healius Limited;
• two mergers were withdrawn: Qube’s proposed acquisition of Newcastle Stevedores and Greencross’ proposed acquisition of Habitat; and
• three mergers were cleared subject to an undertaking: Sika AG/MBCC Group, Viva Energy/OTR Group and Woolworths/Petstock.

In 2023, the ACCC completed consideration of three merger authorisation applications:

• Armaguard/Prosegur;
• ANZ/Suncorp Bank; and
• Brookfield and MidOcean/Origin Energy.

The ACCC approved the Armaguard/Prosegur merger, subject to a behavioural undertaking, in June 2023. In August 2023, the ACCC denied authorisation for ANZ’s proposed acquisition of Suncorp Bank, and the parties successfully appealed the decision to the Australian Competition Tribunal, which set aside the ACCC’s decision in February 2024. In October 2023, the ACCC granted merger authorisation subject to conditions for the proposed acquisition by Brookfield and MidOcean of Origin.

Recent ACCC Enforcement and Investigative Action

Noting that there are no fines or penalties for failing to notify, the ACCC has historically had limited success in taking action in the courts in relation to mergers. For example, the ACCC was unsuccessful in the high-profile enforcement proceedings that it brought against the merger parties in Pacific National’s acquisition of Aurizon for alleged breaches of Section 50 of the CCA.

The ACCC does not always commence enforcement action where parties complete a reviewed transaction without ACCC approval. For example, the ACCC has not announced any enforcement action against Google for completing the acquisition of Fitbit in January 2021 without ACCC approval. It also investigated Qube/Newcastle Agri Terminal after the parties completed the transaction before the ACCC had completed its review, but announced in March 2022 that it would not pursue enforcement action against Qube. Its post-completion investigation into Facebook’s acquisition of Giphy (which was not notified to any competition authority prior to completion) has also not resulted in any enforcement action since it commenced in 2021.

However, the ACCC has been able to use the informal clearance process to prevent mergers that it considers raise competition issues, either because the parties withdraw or provide remedies to address the concern (primarily via divestiture). Notably, in 2021, the ACCC successfully obtained an interlocutory injunction to restrain the Virtus/Adora merger.

In 2023, shortly after the ACCC commenced its review of Woolworths’ proposed acquisition of a majority interest in Petstock, the ACCC discovered that Petstock had completed a large number of acquisitions in the pet industry in recent years that had not been notified to the ACCC. In March 2023, the ACCC began investigating those prior acquisitions and, in December 2023, accepted a court-enforceable undertaking from Petstock to divest a package of sites and assets, including 41 retail stores.

As discussed in 2.1 Notification, the ACCC identifies competition concerns in its compliance and enforcement priorities and in its inquiries. The ACCC’s priorities for 2024-25 include competition and consumer issues arising in relation to:

• essential services (with a focus on telecommunications, electricity, gas and financial services);
• the supermarket sector;
• the aviation sector;
• environment and sustainability; and
• digital platforms and the digital economy.

As outlined in 10.1 Recent Changes or Impending Legislation, the government has announced significant merger reforms which are due to commence on 1 January 2026.

The ACCC has expressed it is particularly focussed on acquisitions by large digital platforms with market power, in particular acquisitions that protect or extend the market power of large digital platforms, such as acquisitions that enable platforms to expand into related markets. The ACCC is exploring the impact of these acquisitions on competition in its ongoing Digital Platform Services Inquiry.

In recent years, the ACCC has also shown particular interest in mergers in:

• the health sector ‒ for example, it obtained an interlocutory injunction in 2021 to prevent the acquisition of Adora Fertility by Virtus Health;
• financial services ‒ such as in the ANZ/Suncorp merger authorisation application; and
• in transactions in the digital and data space ‒ such as MYOB/GreatSoft, Dye & Dun/Global X, Salesforce/Slack, Microsoft/Activision, Westpac/HealthPoint, www.realestate.com.au/Dynamic Methods (which was withdrawn) and Google/Fitbit.