Lawless and incompetent: ACCC’s gone rogue with ANZ/Suncorp dithering

The ACCC has combined breathtakingly arrogant lawlessness with stunning, if hardly surprising, regulatory incompetence in its dithering over ANZ’s attempt to take over Suncorp bank.

It’s been a year since ANZ launched its bid – and more than seven months since it formally applied for ACCC approval.

But it is only now that the ACCC is finally in a countdown to a decision early next month; most likely a rejection, which would have no basis in either fact or, more importantly, law.

Now, most people will – to put it mildly – be unsympathetic to one of the four big banks getting a ‘black eye’; especially one that stops it taking over one of the regionals.

But sympathy or antipathy to a big bank is simply irrelevant. The ACCC must reject or approve a merger in accordance with the law.

And there is simply no basis – legal or factual - for rejection, as the ACCC’s own website makes crystal clear in describing what it can and cannot do about merger proposals.

And I quote: “We can’t oppose mergers that reduce competition unless the effect is substantial”.

The ACCC has combined lawlessness with stunning regulatory incompetence in its dithering over ANZ’s attempt to take over Suncorp bank. Picture: William WEST / AFP

The law that the ACCC is charged with enforcing only bans mergers which are “likely to substantially lessen competition”.

The idea that the ANZ, the weakest of the big four, acquiring Suncorp would substantially reduce competition in banking is utterly ludicrous.

It’s utterly ludicrous at the macro level – various overall shares of banking.

It’s ludicrous at the micro level – individual banking markets.

Yes, it could “reduce competition”, like on a high street with both ANZ and Suncorp branches, and one will be closed.

But the loss of competition has got to be substantial; and there is zero evidence of that.

Indeed, the ACCC has itself all-but – if, in the regulatory way, totally unknowingly - admitted this. It’s made a desperate ploy, late in the piece, to get a British economist to analyse the competitive impact of the merger.

But analyse, not just the ANZ-Suncorp merger, but also – and this is where the ACCC has gone deep into regulatory lawlessness – of a ‘counter-factual Suncorp-Bendigo Bank merger.

Sorry, it’s not the ACCC’s job to promote ‘better mergers’.

Its job is to assess the competitive impact of the proposal under its review in relation to the current competitive situation. Not against some possible alternative future.

Both the economist analysis and regulatory logic also exposes why this ‘better merger’ route is both lawless and incompetent. It fails to, as it simply cannot properly, assess the direct competitive impact of that ‘better’ -‘two regionals’ - merger.

At least arguably – I would suggest unquestionably – a merger of Bendigo and Suncorp would lead to more loss of competitiveness that an ANZ-Suncorp merger.

As they more directly chase the same customers, and across most of their banking.

There’s also the stunning regulatory incompetence.

The ACCC has had 30 and more years to ‘think about’ big banks buying regionals; you’d thunk it would have worked out the competitive consequences by now, rather than take seven months to get nowhere.

And after, I might note – yes, under different chairman – ticking through big bank takeover after big bank takeover.

Do I need to list them all?