- When one firm buys another firm or its assets, it can become more efficient and innovative. This can result in benefits for consumers and the Australian economy.
- In some cases, mergers can significantly reduce competition. This can result in higher prices, lower quality of service or less innovation and choice.
- The Competition and Consumer Act 2010 prohibits mergers that are likely to substantially lessen competition.
What the ACCC does
- We investigate mergers to determine whether they are likely to substantially lessen competition.
- We can apply to the court to stop a merger if we think it is likely to substantially lessen competition.
- We keep a register of mergers under public review.
What the ACCC can't do
- We can't oppose mergers for reasons that aren’t competition related.
- We can't oppose mergers that reduce competition unless the effect is substantial.
When one firm buys another firm or its assets, it can become more efficient and innovative. This can result in benefits for consumers and the Australian economy.
However, mergers and acquisitions can also have an impact on competition. In many cases, this impact will be minimal. But some acquisitions can substantially lessen competition by reducing the number of competitors and changing the way the remaining competitors behave.
When competition is reduced, consumers can be affected through:
- higher prices
- reduced product or service quality
- less choice and innovation.
The Competition and Consumer Act 2010 prohibits mergers which are likely to substantially lessen competition in a market.
Merger parties are not legally required to:
- notify the ACCC of a merger, or
- wait for the ACCC to give its view on the likely impacts to competition before completing a merger.
However, going ahead without obtaining the ACCC view risks the ACCC taking legal action that can prevent or slow down the transaction.
We encourage merger parties to contact us as early as possible when a merger is being contemplated that may raise competition issues and well before it is completed.
Merger parties should be aware that some actions they take while anticipating a merger can expose them to legal action for ‘gun jumping’. This is when merger parties start to coordinate their activities or behave as one entity instead of as competitors during the period before the merger is completed. See Gun jumping risks for merger transactions.
The ACCC reviews mergers to determine whether they are likely to substantially lessen competition. Our aim is to ensure that markets work well for consumers.
Merger parties have 2 options to seek the ACCC’s view on a proposed merger:
- public informal merger review - an informal process used by merger parties to seek the view of the ACCC. It provides no protection from legal action.
- merger authorisation - a formal process that gives statutory protection from certain legal action.
We keep registers of mergers that are subject to an ACCC public review or merger authorisation.
For public merger reviews, the register includes the:
- start date
- indicative timelines for our decision
- key issues we are seeking feedback on from interested parties
- the outcome of the review.
There is a register for each of our review options. See:
If the ACCC reaches a view that a merger is likely to substantially lessen competition and the merger parties don’t agree to modify or abandon their proposal, the ACCC can apply to the Federal Court for orders to prevent or unwind the merger.
We can’t oppose a merger for reasons that aren’t competition related, such as community preferences or national interest considerations.
We encourage merger parties to contact the ACCC as early as possible when a merger is being contemplated and it potentially raises competition issues. We can discuss possible competition issues and review options.
This may be done on a confidential basis.
Contact us by:
- phone on (02) 6243 1368, or
- email email@example.com.