On 10 April 2024, the Treasury announced its intention to introduce a “fast, stronger and simpler merger system” within Australia’s merger laws.¹ The new merger control system will apply from 1 January 2026. The merger reforms propose a single, streamlined merger control system which is set to enhance efficiency, predictability and transparency for all stakeholders and aim to limit the scope for strategic behaviour by parties to a merger. The new mandatory reporting regime will replace the existing voluntary informal notification and merger authorisation model and is said to better equip the Australian Competition and Consumer Commission (ACCC) to detect, review and protect consumers from anti-competitive mergers.  

Key features of the proposed merger reforms

1. Mandatory notification thresholds: Targeted mandatory notification thresholds will be both monetary and share of supply or market-share based. In 2023, the ACCC proposed that an acquirer or target turnover threshold of AU$400 million or global transaction value threshold of AU$35 million could be appropriate.² However, these thresholds are yet to be determined and subject to consultation and compulsory review. 

2. Creeping acquisitions: In response to concerns around creeping acquisitions, when calculating the mandatory notification threshold (irrespective of whether the individual mergers are notifiable), all mergers within the previous three years by the acquirer or the target will be aggregated. The three-year period is considered by the Treasury to be an appropriate reference period to capture incremental changes resulting from mergers, strategic business behaviour and consider dominant market positions. Further, there may be specific thresholds that are mandated by Ministerial directive in ‘high risk’ industries – a concept yet to be formalised.

3. Stronger administrative decision making: At first instance, the ACCC will be the expert administrative decision-maker. The ACCC’s role will include to determine whether a merger may be given clearance and the conditions imposed on the merger (if applicable). This will shift the administrative decision-making from judicial enforcement (i.e. the Federal Court) to the ACCC. The ACCC will engage with the merger parties and conduct a wide consultation process with third parties, including consumers, suppliers and competitors affected by the proposed merger. 

4. No ‘call-in’ power: Mergers below the threshold may be voluntarily notified to the ACCC. However, the ACCC will not have the ability to ‘call-in’ below-the-threshold mergers but may investigate them for a breach of any other relevant provision of the Competition and Consumer Act 2010 (Cth) (CCA). 

5. Suspension: The proposed suspensory regime will prohibit merger parties from completing a transaction until the ACCC or the Australian Competition Tribunal (Tribunal) makes a determination to grant merger clearance. This shift in power to the ACCC is in line with other developments in the UK and elsewhere that gives greater power to the economic regulator. Treasury has outlined an indicative review timeline which is broadly consistent with international best practice and includes, without limitation, a ‘Phase I’ review period of 30 working days and an in-depth ‘Phase II’ review period of 90 working days, with an available fast-track determination available after at least 15 working days if the ACCC has not identified any concerns. 

6. Upfront notification requirements and fees: Notifications to the ACCC will require a specific amount of up-front information, which will be subject to a consultation process in 2025. Further, all merger notifications will be accompanied by a fee which Treasury expects to be around AU$50,000 to AU$100,000 for most mergers. Fee exemptions will be available for small businesses.   

7. ACCC public registers: All mergers considered by the ACCC will be listed on the ACCC’s public register. This register will contain brief information including the names of the merger parties, a short description of the transaction and affected products and/or services. The ACCC will also provide its findings on the material facts and reasons for all determinations, to facilitate transparency in the administrative system.  

8. Legal test: The existing substantially lessen competition (SLC Test) under the CCA,³ which prevents a merger that the ACCC determines is likely to ‘substantially lessen competition’, will be retained. Unlike the original proposal by the ACCC that shifted the onus onto an acquiring party to demonstrate that there would be no SLC resulting from the merger, the ACCC will formally retain the onus of proof. The ACCC must reasonably believe that the merger ‘creates, strengthens or entrenches a position of substantial market power’ in any market before disallowing a merger. This and the fact that there will be a ‘limited’ merits review before the Australian Competition Tribunal (disallowing new factual evidence unless it was not in existence at the time of the regulatory decision) will have significant implications for the evidence that should be placed before the ACCC. The existing statutory ‘merger factors’ in s50(3) of the CCA will be replaced with administrative regulatory principles promulgated by the ACCC. The law in relation to control of administrative power will be of greater significance under the new regime.

9. Public benefits test: Following the ACCC’s ‘Phase II’ determination, merger parties who are unsuccessful, may seek approval for the merger from the ACCC on public benefit grounds. The threshold for the public benefits test would be whether the merger would result in a substantial benefit to the public which outweighs the anti-competitive detriment of the merger.

10. Penalties: Failure to notify the ACCC of a notifiable merger or the completion of mergers without the ACCC’s determination (or mergers contrary to the ACCC’s determination) will incur substantial penalties and will be void. The provision of false and misleading information to the ACCC will also be subject to penalties. Treasury will consult on the penalty provisions in 2024. 

What’s next? 

• Further stakeholder consultation is expected in 2024 to finalise outstanding details of the merger reforms including merger notification thresholds.
• Consultation with the ACCC is also expected in 2025 in the form of notification and information requirements and the ACCC’s guidance on the new merger control system.
• The government will then introduce legislation, subject to the legislation passing through Parliament, to implement the proposed changes which are intended to take effect from 1 January 2026. 

1. The Treasury, Merger Reform: A Faster, Stronger and Simpler System for a More Competitive Economy (Government Response, 10 April 2024). 
2. Australian Competition and Consumer Commission, Outline to Treasury – ACCC’s proposal for merger reform (Submission, March 2023). 
   
3. Competition and Consumer Act 2010 (Cth) s 50.