ACCC makes submission on ‘creeping’ acquisitions The ACCC has responded to the government’s second discussion paper containing further proposed legislative amendments to deal with the issue of ‘creeping’ acquisitions. Creeping acquisitions refer to acquisitions of a number of individual assets or businesses that individually are unlikely to contravene section 50 of the TPA (which prohibits mergers that would substantially lessen competition in a market) but collectively may raise competition concerns over time.
As reported in our May 20092 update, Treasury asked for submissions on two proposed options which could be used to regulate creeping acquisitions:
- legislative amendments that would prevent mergers and acquisitions that would enhance a corporation’s substantial market power, and
- legislative amendments that would grant the Minister power to ‘declare’ certain corporations or product/service markets. This declaration would prevent the declared corporation or corporations in a declared product/service market from making mergers and acquisitions that would enhance substantial market power.
In response to the two proposals, the ACCC has made a submission expressing support for the first proposal. However, the ACCC recommended that the proposal be amended so that expressing support for the creeping acquisition law would apply only if the enhancement of market power that results from the acquisition is ‘not insignificant’. The ACCC considers that this addition would ensure that the proposed law ‘would not capture trivial matters, but at the same time would not set the threshold [of demonstrating enhanced market power] so high that it would defeat the objective of the proposed amendment’.
The ACCC did not support an alternative proposal to provide the Minister for Competition Policy and Consumer Affairs with power to limit the application of the creeping acquisition law to corporations or product/service markets that are ‘declared’ by the Minister, and set mandatory notification thresholds for those corporations and product/service markets that are ‘declared’. The ACCC considered that this would introduce a level of regulatory complexity that goes beyond what is necessary to address the issues.