There is no doubt that the international competition law landscape is changing. While calls for increased regulation of ‘big tech’ frequently make headlines, there is a broader shift in competition regulation occurring, which will affect companies across all industries. Regulators worldwide have intensified scrutiny of proposed mergers and acquisitions, and Australian businesses are unlikely to be an exception to this. It is increasingly important that businesses are aware of changes to the global, and local competition law landscape, and how these may affect global and local acquisitions.
Globally, the way in which regulators perceive and assess mergers and acquisitions is shifting. There is a growing focus on increases in market power and regulators across jurisdictions are moving towards broad jurisdictional tests and ‘over-regulation’ rather than under. In addition, information sharing and coordination of approaches and investigations across jurisdictions is increasing, meaning even local deals are impacted by international developments. Some notable developments in the international landscape are;
In this environment, even wholly domestic businesses may be impacted by changing global trends in competition regulation. Particularly as the ACCC becomes more enmeshed in the international landscape, both in its policies and its enforcement actions. The influence of international trends on Australian regulation can be seen, for example, in the ACCC’s recent statement on reforms to Australia’s merger laws. In this statement, the ACCC called for strengthening of Australia’s laws, noting they would then be brought into line with those of the UK, Japan and other jurisdictions.
Broadly speaking, the ACCC has indicated that it considers Australian merger laws are no longer fit for purpose, and are skewed in favour of clearance. In order to address this, the ACCC has proposed the establishment of a compulsory merger regime (based on pre-determined thresholds), changes to the merger factors, stricter rules for firms with substantial market power and a bespoke regime for digital platforms.
In addition to this, in its Digital Platforms Report, AdTech Inquiry and report into internet search the ACCC has taken a robust, internationally facing approach to digital markets. This increasingly international approach is likely to be strengthened overtime given the Chair of the ACCC was recently appointed as the new Vice Chair Digital Co-ordination and Asia-Pacific Liaison within the International Competition Network. The ACCC is no doubt moving with the international trends in competition law, and its enforcement and regulatory activities will increasingly be influenced by what is happening on the world stage.
In this environment, complex and even non-complex transactions will have the best chance of success if they are conducted with a strategic and practical eye to the way in which these international trends may play out. Global or online businesses seeking to merge or acquire another business will need to be aware of changes to the international regulatory environment. However, local, Australian based businesses will also be impacted by these global trends.
Some of the biggest changes to deal-making that you can expect are;
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