Reform of laws governing mergers and acquisitions is urgently needed to bring Australia in line with other developed economies and ensure the merger laws are effective in preventing anti-competitive transactions, particularly during the current cost-of-living crisis, the ACCC has told the Treasury Competition Review.

The ACCC’s second submission to the review, published today, highlights its concerns with Australia’s current merger laws and how the cost of an ineffective merger regime largely falls on consumers and the economy.

“Australian consumers, farmers, and small businesses need to have confidence that potentially anti-competitive acquisitions will be scrutinised and if necessary prevented,” ACCC Chair Gina Cass-Gottlieb said. 

“Without effective merger control, we are all likely to face higher prices, lower quality, less innovation, less choice and lower productivity across the economy.”

“The submission outlines the ACCC’s proposed reforms which, as a package, are effective, balanced and proportionate,” Ms Cass-Gottlieb said.

The ACCC’s calls for merger reform have been met with resistance from some stakeholders who cite a lack of evidence justifying changing the status quo.

However, the research commissioned by the Competition Review Taskforce now provides clear evidence in support of merger reform, strengthening the ACCC’s confidence in its recommendations.

The research demonstrates that an estimated 1000-1500 mergers occur in Australia each year. Only  about 330 are notified to the ACCC under the existing voluntary merger regime.

About half of the 1000-1500 mergers are made by the largest one per cent of businesses.

“New data from the Competition Review Taskforce confirms that we are not being told of many mergers taking place, including by Australia’s biggest corporations. In addition the Taskforce’s analysis shows that larger firms have increased their merger activity over recent years,” Ms Cass-Gottlieb said.

 “This means we do not have the chance to consider how they may harm competition and consumers. It is important to note that the most significant increases in merger activity are occurring in sectors like manufacturing, retail, professional services, and health and social services, which are markets that directly impact consumers as they go about their lives.”

“For example, we recently found while investigating a separate transaction that Petstock, a speciality pet product and services retailer, had completed a large number of concerning acquisitions in the pet industry that were not notified to the ACCC despite raising significant competition concerns. This matter was ultimately resolved with Petstock committing to sell a significant number of stores,” Ms Cass-Gottlieb said.

“This is particularly concerning given an ongoing and significant increase in market concentration in Australia’s economy over the last decade. This rise in market concentration has brought with it a noticeable weakening of the intensity of competition across a number of sectors.”

The reform package proposed by the ACCC includes many of the features contained in merger regimes in other major economies, including mandatory notification of mergers above certain thresholds and a requirement to not complete the transaction until approval is granted. 

To minimise any burden on businesses involved in non-contentious mergers, the ACCC proposes a waiver process which would allow for a fast-track 20 business day exemption from the requirement to lodge a formal notification. This would allow the vast majority of mergers to be assessed expeditiously.

Businesses would also benefit from greater certainty about review timeframes, and published reasons.

The ACCC’s proposal also provides for a right of review to the Australian Competition Tribunal which is not available under the current informal merger clearance regime.

The ACCC has proposed a carefully calibrated regime which focuses on transactions most likely to result in harm. Analysis commissioned by the ACCC showed that among the most contested transactions, 60 per cent occur in already highly concentrated markets with three or less remaining competitors, where consumer harm is more likely to occur.

An important focus of the ACCC’s reforms is to ensure that the combination of an administrative regime, mandatory notification, appropriate call-in powers and a fit-for-purpose approval test provide the necessary tools to deal with serial acquisitions.

“Dealing with serial or ‘creeping’ acquisitions has been a long-standing challenge for the ACCC, particularly as it may be argued that each separate acquisition may not trigger current legal prohibitions in our merger laws, but together, and over time, they can result in serious harm to competition,” Ms Cass-Gottlieb said.

The Treasury Competition Review provides a unique opportunity to overhaul Australia’s outdated merger reform regime, move away from the current inefficient and ineffective enforcement-based model, and follow international best practice.

“The ACCC’s strong view is that the competitiveness of Australian markets is best preserved by moving to a regime where, for the most significant mergers, the merger parties must make their case that their proposed transaction should be cleared. They should be required to produce evidence that  satisfies the ACCC that there will be no likely substantial lessening of competition,” Ms Cass-Gottlieb said.

The submission can be viewed on the ACCC’s website here: Submission to Treasury on merger reform


In response to the Competition Taskforce’s Merger Reform Consultation Paper, on 20 December 2023 the ACCC provided a preliminary submission to the Taskforce outlining the ACCC’s preliminary comments regarding the three options for reform outlined in the Consultation Paper. The preliminary submission can be viewed on the ACCC website

Treasury Competition Review

On 23 August 2023, the Treasurer announced a Competition Review.

The Review is being run by The Treasury. Further information is available here:

The Australian informal merger review regime

Section 50 of the Competition and Consumer Act prohibits the acquisition of shares or assets if the acquisition would have the effect, or be likely to have the effect, of substantially lessening competition in any market. The ACCC is empowered to bring Federal Court proceedings to seek court orders to prevent or unwind a merger that breaches section 50, and to seek pecuniary penalties for contraventions of section 50.

It is not mandatory for merger parties to notify or seek ACCC approval before proceeding with a merger, but over the years an informal process has developed to provide an avenue for merger parties to seek the ACCC’s view on whether it will oppose the proposed transaction on the basis that the merger is likely to substantially lessen competition. This is known as the ‘informal merger review regime’.

Under the informal merger review regime, the ACCC relies on merger parties voluntarily notifying the ACCC of a proposed acquisition, and providing sufficient information to the ACCC to enable an efficient and proper assessment of the competitive effects of the proposed acquisition.

If the ACCC considers that a proposed acquisition is likely to substantially lessen competition and the merger parties do not agree to abandon the transaction, the ACCC must commence proceedings in the Federal Court to obtain orders preventing the transaction from completing (if it has not already occurred, in which case the ACCC may seek divestiture orders or an order that the transaction is void, and penalties).