Creeping acquisitions

Articles Written by Dr. Wolfgang Hellmann (Special Counsel)

On 25 November 2011, the Senate passed the Competition and Consumer Legislation Amendment Bill 2011 which amends the merger control provisions in section 50 of the Competition and Consumer Act 2010 (CCA). The amendments are intended to ensure that section 50 of the CCA applies to "creeping acquisitions" which are generally defined as consisting of a series of small-scale acquisitions that individually do not substantially lessen competition in a market, but collectively may have that effect over time.

The amendments, which will take effect no later than 2 months after the Bill receives Royal Assent, are

  • the qualifying word "substantial" will be removed from the definition of "market" in section 50(6) of the CCA. The intention is to ensure that the ACCC and a court can review a merger in any market, regardless of its size (for example, acquisitions in local markets); and
  • the reference to "a market" will be changed to "any market" in section 50(1) of the CCA. The intention is to clarify that the ACCC and a court can consider multiple markets (including markets other than the primary market/s in which the merger will occur) when assessing the competition effects of a merger.

The amendments will provide legislative support for the ACCC's existing approach to merger review. We do not expect that they will result in any significant changes to the ACCC's practice.

Important Disclaimer: The material contained in this article is comment of a general nature only and is not and nor is it intended to be advice on any specific professional matter. In that the effectiveness or accuracy of any professional advice depends upon the particular circumstances of each case, neither the firm nor any individual author accepts any responsibility whatsoever for any acts or omissions resulting from reliance upon the content of any articles. Before acting on the basis of any material contained in this publication, we recommend that you consult your professional adviser. Liability limited by a scheme approved under Professional Standards Legislation (Australia-wide except in Tasmania).

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