ACCC to retain informal merger process

"The Australian Competition and Consumer Commission will retain the informal merger review process alongside the new formal merger clearance process which is expected to start later this year," ACCC Chairman, Mr Graeme Samuel, announced today.

"The ACCC is committed to the informal process because of its efficiency, effectiveness and flexibility. However, we will review our commitment to this process in the event that business or their advisers seek to 'game' the process in a way that undermines the effective operation of section 50 of the Trade Practices Act.*

"Global Competition Review, in the 6th annual Rating Enforcement Survey of competition regulators around the world, noted that the ACCC is at the forefront of international regulation of mergers and that the informal review system is both effective and strikingly popular with business.

"The ACCC agrees wholeheartedly with the GCR's findings and notes the GCR's suggestion that other regulators consider using the Australian model", Mr Samuel said.

In October 2004 the ACCC issued its Guideline for informal merger reviews which established new procedures to increase the transparency of the process and the accountability of the ACCC. The measures adopted included providing indicative timelines for merger assessment, public Statements of Issues identifying competition concerns prior to a final decision, and comprehensive reasons for decisions in matters where there is significant public interest in the decision.

"The ACCC is currently conducting an internal review of the guideline with a view to identifying if any further improvements can be made to the informal process – this underscores the ACCC's commitment to the continued consideration of mergers on an informal basis", Mr Samuel said.

The revised Guideline for informal merger reviews will be issued later this year.

Mr Samuel was speaking at the Committee for Economic Development of Australia in Sydney.

Background

*Section 50 of the Trade Practices Act 1974 prohibits mergers or acquisitions which would, or would be likely, to result in a substantial lessening of competition in any market in Australia.