Creeping acquisitions

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.