‘Major and balanced’: ACCC boss spruiks changes to takeover rules

ACCC chair Gina Cass-Gottlieb has described proposed sweeping changes to merger and acquisition rules as ‘major and balanced’.

ACCC chairwoman Gina Cass-Gottlieb. Picture: Sam Ruttyn

ACCC chair Gina Cass-Gottlieb has proposed sweeping changes to merger and acquisition rules, saying the overhaul would be “major and balanced” and that the nation needed a takeover regime that was “fit for purpose”.

The ACCC on Friday published a submission to Treasury outlining its vision for a transformed regulatory landscape, including handing the ACCC upgraded powers to approve or reject M&A applications, alongside compulsory notification to prevent the majority of transactions flying under the watchdog’s radar.

Ms Cass-Gottlieb pointed to economic analysis from the Competition Taskforce showing that of the 1000-1500 mergers in Australia annually, under the current voluntary disclosure regime only about 330 are notified to the regulator.

About half of these mergers each year were made by the largest 1 per cent of businesses, she said, suggesting that dominant firms were accumulating market power by quietly gobbling up small competitors – all behind the regulator’s back.

The Treasury Competition Taskforce – which kicked off in August last year – revealed that 60 per cent of mergers were occurring in sectors with three or fewer competitors.

“It is totally extraordinary,” Ms Cass-Gottlieb said.

Ms Cass-Gottlieb said too much industry concentration led to “higher prices and less choice” for consumers. And to be able to prevent anti-competitive mergers, “firstly we need to make sure we see them all”.

Under the proposal, the regulatory regime will shift from an “informal enforcement” approach – where the ACCC has to take companies to court if they disagree with a ruling against a merger – to mandatory rules granting the regulator power to block applications.

If dissatisfied, firms would be able to go to the Australian Competition Tribunal.