Jim Chalmers’ competition law update muddies waters

Federal Treasurer Jim Chalmers. Picture: NewsWire / Martin Ollman

Treasurer Jim Chalmers has left key questions open in his draft of competition law changes, released on Wednesday – notably the thresholds above which mergers need to be notified.

The proposed amendments were agreed to in principle in April this year, nearly three years after first being advocated by the ACCC and 15 months after new ACCC boss Gina Cass-Gottlieb endorsed the changes.

By failing to signal the key changes necessary, Chalmers has simply kicked the can down the road for a decision at a later date.

The new regime is in principle a revolutionary change from voluntary to mandatory notification, which makes the threshold the key issue, but this will now be subject to a separate consultation.

Big business has strongly opposed the ACCC’s suggested $35m threshold, above which all acquisitions need to be filed with the commission.

The draft amendments do clarify that on-market purchases of 20 per cent trigger notification, which brings the competition law in line with the companies legislation.

The draft amendments say that if the ACCC has a “suspicion” a deal will substantially lessen competition, it can move the investigation into phase two, which would take up to four and a half months, from the 30-day phase one inquiry.

Just how “suspicion” is defined is moot. It’s a new concept in competition law, which now requires a “real chance” the deal will result in a substantial lessening of competition to trigger ACCC ­concerns.

It is also unclear how the ACCC will be more transparent under the changes.

The changes are aimed at simplifying administration of the law, which in effect puts the ACCC in the box seat as the initial arbiter, with court review limited until after it makes a determination – and only on the merits of the ­decision.

This is one leg in the creation of a more competitive economy by helping to stop more consolidation, but the best way to increasing competition is by bringing on new competitors through breaking down the barriers – by, say, allowing super funds to lend for housing to compete with the banks.

Merger laws may slow consolidation but government intervention and technology is required to increase competition.

The choice of British competition lawyer Andrea Gomes da Silva as an additional adviser surprised some, given she comes from a different merger regime.

In all, Treasurer Jim Chalmers has increased confusion and raised barriers to his plans to introduce the changes into parliament in the September session this year.