ACCC needs to know its own law

The ACCC should stop attempting to broker and influence ANZ’s proposal to buy Suncorp and instead learn the laws it’s supposed to enforce.

It seems the ACCC’s deputy commissioner Mick Keogh needs a remedial course on the competition law and the way the ACCC is supposed to regulate and enforce it.

At the same time his boss, ACCC chair Gina Cass-Gottlieb, could benefit from understanding that regulators like the ACCC are there to regulate the law not to demand changes to make their life easier.

The ACCC has already taken nearly a year to consider ANZ Bank’s proposal to buy the Queensland based Suncorp.

And now it seems to have assumed the right to try to ‘broker’ a ‘better’’ merger.

As I argued last year the ACCC could hardly reject ANZ’s attempt to increase its national market share from 13 per cent to around 15.5 per cent when it had previously ticked through Westpac’s far more significant takeover of St George Bank.

Yes, Suncorp is big in Queensland, but St George was even bigger in NSW – Westpac’s home state and where it was the dominant bank.

The Westpac-St George merger had a far, far bigger impact on competition in NSW than an ANZ-Suncorp merger would in Queensland. And in ways the business-lite ACCC was and remains incapable of understanding.

Recent comments by Keogh suggest an apparent belief that he, the ACCC, can broker a ‘better merger’: that of Suncorp with one of the other regionals.

Trying to ‘heavy’ Suncorp into switching from ANZ to a regional is, quite simply, outrageous regulatory overreach. Photo: David Clark

The ACCC started that a “merger with a second-tier bank has a realistic prospect of occurring” and that this would be better for the competitive landscape.

Sorry, that is very specifically not the ACCC’s job. And it is most definitely way outside and above its competence.

The only bank merger proposal before the ACCC is that of Suncorp with ANZ. It is utterly irrelevant that the ACCC might think another one would be both possible and ‘better’.

Further, trying to ‘heavy’ Suncorp into switching from ANZ to a regional is, quite simply, outrageous regulatory overreach.

On mergers the law is crystal clear. The ACCC can only reject one if it concludes it will “substantially lessen competition”.

It would seem Keogh doesn’t understand much of this; hence my suggestion that he might benefit from a remedial course.

Or perhaps he could just look at the ACCC’s own merger homepage, where it states, explicitly: “We can’t oppose mergers that reduce competition unless the effect is substantial.”

And nowhere is there any suggestion that the ACCC can oppose a merger because there is a ‘better’ one that the ACCC would like to ‘broker’.

Keogh’s comments, pointing to regulatory hubris and overreach, was also reflected in a recent speech by his chair. That’s the person who heads the ACCC, not on what he sits.

In a speech earlier this month, Cass-Gottlieb laid out a laundry list of changes she demanded to the merger laws.

She claimed they would protect competition.

The changes would certainly increase the regulatory reach and intrusiveness of the ACCC – indeed to the effect of seriously reducing competition, by gumming up the functioning of business.

The far-too long ANZ-Suncorp experience is a public and damning rejection of the idea of giving the ACCC more such intrusive powers.

Originally published as ACCC needs to know its own law