Elizabeth Avery is the head of and senior partner in Gilbert + Tobin’s competition, consumer and market regulation group. She advises on a broad range of cutting-edge competition law issues, including mergers, enforcement litigation and investigations, and ongoing strategic/operational advisory work. Her expertise spans across a broad range of industries, including financial services, the digital economy, health and life sciences and infrastructure. She has a particular focus on multi-jurisdictional matters, advising a range of participants on transactions, investigations and strategic initiatives.

Sarah Lynch is a special counsel who is experienced across the spectrum of Australian, EU and UK competition, regulatory and consumer protection law, including assisting clients in relation to complex merger clearances and litigation, enforcement investigations and strategic advisory work. Sarah has worked with clients in a diverse range of industries, and has particular expertise in ports and infrastructure, energy networks, financial services, stock exchanges, digital platforms and services and consumer goods.

Matt Rubinstein is a lawyer in Gilbert + Tobin’s competition, consumer and market regulation group. His practice focuses on competition, regulatory, commercial and policy advice. He has advised on structuring and represented clients before regulators and governments in a wide range of industries.

Lachlan Green is a lawyer in Gilbert + Tobin’s competition, consumer and market regulation group who has experience in complex merger clearances, litigation and enforcement investigations, having recently advised clients on complex merger authorisation and clearance in the transport and logistics, aviation and healthcare industries.


1 What are the key developments in the past year in merger control in your jurisdiction?

Merger parties have two Australian Competition and Consumer Commission (ACCC) review options: merger authorisation or informal clearance. Under the merger authorisation process, the ACCC may grant authorisation where the acquisition will not be likely to substantially lessen competition (a competition test) or will be likely to result in public benefits that outweigh any detriments (a net public benefit test). Public benefits may include economic and environmental efficiencies and a range of social benefits.

Over the past 12 months, ACCC merger authorisation has matured as an option for merger parties who may need to rely on public benefits. The ACCC reached a decision on three merger authorisation applications in FY2022–23 (Linfox Armaguard/Prosegur, Telstra Corporation/TPG Telecom and ANZ/Suncorp Bank) and reached a decision on a further application in October 2023 (Brookfield/Origin Energy).

The ACCC has also authorised its first mergers on the basis of net public benefits after reaching a view that the merger would result in a substantial lessening of competition (Linfox Armaguard/Prosegur and now Brookfield/Origin Energy, which was notably decided on environmental benefits). Prior to this, the ACCC had only granted authorisation where it had found that the proposed merger would not substantially lessen competition (subject to undertakings in the case of AP Eagers/Automotive Holdings and BPAY/eftpos/NPP amalgamation). However, the ACCC also refused to accept public benefits arguments in two of the applications (Telstra Corporation/TPG Telecom and ANZ/Suncorp Bank).

The past 12 months also saw the first appeal of a merger authorisation decision to the Australian Competition Tribunal (the Tribunal) under the new framework (Applications by Telstra Corporation Limited and TPG Telecom Limited (No. 2) [2023] ACompT 2). The decision offers a first insight into the operation of the limited merits review process. Additional information is provided in response to question 2.

The ACCC completed 21 public informal merger reviews in FY2022–23 (down from 26 reviews in FY2021–22), with 10 reviews still under consideration. Of the 21 completed merger reviews:

  • two were opposed by the ACCC (Woolworths Group Limited/SUPA IGA Karabar and Qantas Airways Ltd/Alliance Aviation Services Ltd). This is an increase from FY2021–22 where one merger was opposed under the public review process (albeit this was because the parties proceeded to close the transaction prior to the ACCC completing its review – Virtus Health/Healius), reflecting the ACCC’s focus on increases in concentration in already concentrated industries – in these reviews airlines and supermarkets;
  • two were withdrawn after the ACCC released a statement of issues containing its preliminary assessment of the issues, in which it identified either ‘issues of concern’ or ‘issues that may raise concern’ (Forestry Corporation of NSW/Hume Forests Ltd and Spirit Super and Palisade Investment Partners Consortium/Port of Geelong). The ACCC increased the number of statements of issues released in FY2022–23 (releasing nine for mergers completed in FY2022–23 (up from four in FY2021–22), with a further four released on mergers that are still being considered before the ACCC), despite the number of public merger reviews decreasing. The increased use of statement of issues is seeing merger parties walk away from mergers;
  • one was withdrawn following market feedback and before the ACCC reached a decision on whether to issue a statement of issues (Qube Ports Pty Ltd/Newcastle Stevedores Pty Ltd); and
  • the ACCC reached a decision in the remaining cases and did not oppose any of those applications outright, but required undertakings in five instances (Sika AG/MBCC Group, THL Group/Apollo Tourism, Zoetis Australia Research and Manufacturing/Betrola Investments, Dye & Durham Corporation/Link Administration Holding and Aurizon Holdings Ltd/One Rail Australia Holdings LP). Despite the ACCC’s focus on big tech and concentrated industries, it granted unconditional approval in Google LLC/Mandiant Inc and Korean Air Lines Co Ltd/Asiana Airlines, Inc.

The majority of mergers in Australia (around 93 per cent) continue to be assessed via the ACCC’s pre-assessment process. This provides for relatively expeditious review of non-contentious mergers.

2 Have there been any developments that impact how you advise clients about merger clearance?

In line with previous years (and notwithstanding an increase in the number of transactions opposed by the ACCC), for the vast majority of merger transactions without significant complexity, the ACCC’s informal (and voluntary) merger clearance regime remains a flexible, convenient and relatively effective process for obtaining merger approval.

However, a key development in FY2022–23 was the Tribunal’s first decision in the limited merits review process under the current merger authorisation framework (Applications by Telstra Corporation Limited and TPG Telecom Limited (No. 2) [2023] ACompT 2), which provided clarity on the operation of that process. In particular, the Tribunal’s decision appears to:

  • confirm that the limited merits review process performed by the Tribunal is a review ‘on the papers’. The practical outcome of this is that there is very limited (if any) scope for merger parties to seek to file additional material or examine witnesses to test or clarify evidence before the Tribunal, including where this is intended to respond to material that was before the ACCC, but which was not disclosed to the merger parties during the authorisation process;
  • conclude that the legal standard for satisfaction of section 90(7) of the Competition and Consumer Act 2010 provides both the ACCC and Tribunal with greater discretion to oppose mergers. The negative framing of the competition test in section 90(7) means that parties must convince the ACCC or Tribunal to an administrative law standard of ‘affirmative belief’ (as opposed to demonstrating that no substantial lessening of competition is likely ‘on the balance of probabilities’); and
  • reframe the ‘with and without’ test applicable to causation, applying a ‘normative competition causation’ test. This test distinguishes commercial outcomes caused by a merger (which can be taken into account) from outcomes that are coincident with, but not caused by, the conduct for which authorisation is sought (which are not to be taken into account).

The practical implication of the decision is that merger parties may view the merger authorisation process as less attractive, which could result in an increased use of the informal merger review process, or encouragement for clients to look to the Federal Court of Australia to obtain legal immunity for complex deals opposed by the ACCC (subject to the Federal Court having jurisdiction, see the response to question 6). However, the ACCC’s decision to oppose the authorisation application in ANZ/Suncorp Bank is currently being appealed to the Tribunal, which will provide additional clarity on the application of the limited merits review process under the current merger authorisation framework.

3 Do recent cases or settlements suggest any changes in merger enforcement priorities in your jurisdiction?

In a speech to the National Press Club in April 2023, ACCC Chair Gina Cass-Gottlieb expressed a focus for the ACCC on mergers in already concentrated industries, stating: ‘some markets are particularly vulnerable to being adversely affected by further consolidation’ and ‘the problem of concentration is a growing one in Australia’. The ACCC’s focus has been seen in recent decisions, including:

  • Qantas/Alliance Airlines was opposed by the ACCC in April 2023. In its statement of issues, the ACCC raised concerns that the merger would ‘lead to significant concentration and the removal of Alliance as a strong competitive constraint on Qantas in an already concentrated industry’;
  • Woolworths/SUPA IGA Karabar was opposed by the ACCC in May 2023. The ACCC also raised concerns relating to increased concentration in its statement of issues, stating ‘the [retail grocery] market is already highly concentrated (irrespective of the precise geographic radius applied), and the [merger] would lead to a substantial increase in market concentration’;
  • Telstra Corporation/TPG Telecom’s application for merger authorisation was rejected by the ACCC in December 2022. In its decision, the ACCC reached a view that the merger would ‘entrench Telstra’s position as the largest supplier of mobile services in Australia’ and that any benefits for regional Australia arising from the merger would be ‘unlikely to endure’ and, in any event, would not outweigh the likely public detriments, principally through loss of competition; and
  • the ACCC has also issued statements of issues in four reviews currently under consideration, citing similar concerns regarding increases in concentration in already concentrated markets in two of those mergers (Australian Clinical Labs/Healius and Cochlear Limited/Oticon Medical).

The ACCC has also recently shown a focus on the ‘coordinated effects’ theory of harm. A key part of its decision to oppose the authorisation application in ANZ/Suncorp Bank was based on a theory of coordinated effects in home loan competition. That is, the ACCC considered that the merger would create market conditions conducive to an increased risk of tacit collusion between the ‘big four’ banks in Australia. The ACCC has also raised preliminary concerns relating to coordinated effects in a statement of issues in Australian Clinical Labs/Healius, which is a merger currently under consideration by the ACCC.

The ACCC’s focus also remains on competition issues in global and domestic supply chains, particularly where they are disrupted by the covid-19 pandemic (as evidenced by Qube/Newcastle Stevedores, Spirt Super and Palisade Investment Partners Consortium/Port of Geelong and Aurizon Holdings/OneRail), on big tech and industries where mergers may cause direct consumer harm, including aviation, energy and telecommunications.

4 Are there any trends in merger challenges, settlements or remedies that have emerged over the past year? Any notable deals that have been blocked or cleared subject to conditions?

Two recent merger decisions have demonstrated that it may be more realistic for merger parties to substantiate failing firm arguments in the current economic environment, especially in industries undergoing substantial change. For example:

  • Linfox Armaguard/Prosegur, where the ACCC recognised that the cash-in-transit industry is in structural decline due to the decreasing use of cash as a payment method, and formed a view that it is highly probable that one of the merger parties would cease to supply cash-in-transit services in Australia, within the short term, absent the merger. In reaching its view, the ACCC conducted its own independent analysis of the financial state of each business, including the use of a third-party adviser; and
  • IVE Group/Ovato Limited, where the ACCC did not oppose the merger in circumstances where Ovato had entered voluntary administration in July 2022.

The ACCC has also increased the instances of conditional clearances (from two in FY2021–22 to five in FY2022–23). In these clearances, we have observed a continued preference by the ACCC for structural remedies, with all five conditional clearances requiring a divestment of part of the business as part of the undertaking. However, contrary to its usual practice, in the Linfox Armagaurd/Prosegur authorisation decision, the ACCC accepted an undertaking that included behavioural elements. In addition to requiring certain divestments (surplus cash centre sites, personnel and equipment), the remedy included commitments on price, service levels and geographic coverage of services, which would be monitored by an independent auditor. The undertaking also included a dispute resolution mechanism for price and non-price disputes, which could ultimately be determined by an independent expert.

5 Have the authorities released any key studies or guidelines or announced other significant changes that impact merger control in your jurisdiction in the past year?

The ACCC’s Chair, Gina Cass-Gottlieb, has given a number of speeches that indicate changes to the ACCC’s approach to assessing mergers:

  • in a speech to the Law Council in September 2023, Ms Cass Gottlieb emphasised that ‘the current informal regime … favours a default position for clearance of mergers’ advocating that the right approach to assessing mergers is by application of the ‘precautionary principle’, which is applied in other legal frameworks and is triggered by the threat or serious or irreversible competitive harm. Ms Cass-Gottlieb stated that ‘competitiveness of Australian markets is best preserved by moving to a clearance regime where merger parties must make the case that clearance should be granted’. She noted that the ACCC considers that the risk of blocking an efficiency-enhancing merger ‘is the lesser of two evils’ when weighed against the risk of not blocking an anticompetitive merger, and that this risk should sit with the merger parties and not the public. Reflecting this, in April 2023, the ACCC announced its proposal for reforms to merger review processes in Australia, stating its preference for a mandatory notification regime to be introduced in Australia and proposing a reversal of the onus of proof requiring merging parties to demonstrate, on the balance of probabilities, that a merger is unlikely to result in a substantial lessening of competition. This is discussed in detail in response to question 6; and
  • in a speech to the National Press Club in April 2023, Ms Cass-Gottlieb stated that, when assessing mergers, the ACCC will need to consider new theories of harm associated with the transition to a low-carbon economy. For example, Ms Cass-Gottlieb stated that consolidation within emerging green industries may lead to pro-competitive efficiencies and economies of scale that make nascent industries viable. On the other hand, environmental credentials and sustainable innovation may become increasingly important drivers of competition, and we may see risks to competition arising from mergers between key ‘green competitors’ or ‘killer acquisitions’ of nascent firms that remove the potential for increased competition.

6 Do you expect any significant changes to merger control rules? How could that change your client advocacy before the authorities? What changes would you like to see implemented in your jurisdiction?

In a speech to the National Press Club on 12 April 2023, ACCC Chair, Gina Cass-Gottlieb, affirmed her support for significant reforms to Australia’s current merger control regime. Ms Cass-Gottlieb put forward a proposal for reform containing the following elements:

  • the introduction of a mandatory and suspensory ACCC notification requirement for transactions above certain thresholds. The ACCC’s proposal to the Australian Government Treasury includes two potential metrics for determining whether a merger meets the threshold for review, being a turnover threshold of A$400 million and a global transaction value threshold of A$35 million;
  • a ‘call-in’ power for review of certain mergers that do not meet the threshold, but might otherwise raise competition concerns;
  • streamlined ‘notification waiver’ process for transactions that do not meet the thresholds and otherwise don’t raise competition concerns;
  • upfront information requirements for formal notification (such as estimates of market shares);
  • a reverse onus of proof requiring merging parties to demonstrate, on the balance of probabilities, that a merger is unlikely to result in a substantial lessening of competition; and
  • an appeal right to the Australian Competition Tribunal. Recently disclosed ACCC comments suggest this would be a limited merits review, with a narrower appeal right to the Full Federal Court on judicial review grounds only. Alternatively, parties will continue to be able to apply to the Federal Court for a declaration that the proposed transaction is not unlawful (subject to the constitutional requirement that there be a ‘matter’, ie, a sufficiently concrete, justiciable controversy rather than a hypothetical question).

The ACCC has also proposed that the current ‘substantial lessening of competition’ test include ‘entrenching, materially increasing or materially extending a position of substantial market power’. The ACCC states this inclusion would be framed similarly to the EU test that prohibits concentrations that would significantly impede effective competition ‘in particular as a result of the creation or strengthening of a dominant position’. The ACCC has said it would assist in ‘addressing concerns about creeping acquisitions’, where firms gain market power through a small series of acquisitions that do not amount to a substantial lessening of competition on their own. The ACCC noted creeping acquisitions were particularly an issue in digital platform markets.

The ACCC is also proposing to expand the merger factors to which the decision maker must have regard also include:

  • the loss of actual or potential competitive rivalry;
  • increased access to, or control of data, technology or other significant assets;
  • whether the acquisition is part of a series of relevant acquisitions; and
  • whether the acquisition entrenches or extends a position of substantial market power.

Any changes to Australia’s merger control laws must be implemented through legislative change. In August 2023, Treasury announced a review of competition policy, which would consider, among other things, the proposal put forward by the Australian Competition and Consumer Commission around merger reform. The review will run for the next two years and, rather than issue a single report, the Treasury will publicly consult and release issue papers on specific reform topics. The competition policy review team will include former ACCC Chair Rod Sims (who is a strong proponent of the merger reforms).


The Inside Track

What should a prospective client consider when contemplating a complex, multi-jurisdictional transaction?

The ACCC has expressed frustration that the absence of a mandatory notification in Australia may mean that it is often approached comparatively late, so that it is often faced with either the potential for completion prior to the conclusion of its assessment or holding up a global transaction. While the current framework for voluntary notification remains in place, merger parties should consider early engagement with the ACCC to avoid this situation.

The ACCC has maintained significant coordination with foreign regulators on multi-jurisdictional transactions, including asking parties for their submissions to other regulators and in some cases adopting theories of harm based on overseas analysis. For example, the ACCC considered the merger between Microsoft/Activision Blizzard from June 2022 to October 2023, after suspending the timeline pending the outcome of overseas regulatory reviews.

In your experience, what makes a difference in obtaining clearance quickly?

Providing detailed information upfront (especially market share estimates) and proactively engaging with the ACCC about any issues that are likely to be raised in the course of market inquiries by market participants, foreign regulators or in the media can help prevent lengthy inquiries aimed at answering questions that are ultimately irrelevant. It is also helpful to offer to provide the ACCC with ‘teach-ins’ to assist in understanding the merger parties and the industry, particularly if the industry is new or unfamiliar to the ACCC.

Providing timely response to the ACCC’s request for information and documents also prevents delay and it is important for clients to be prepared for such requests.

If a deal demonstrates significant complexity from the outset, either providing an upfront remedy or opting for merger authorisation may provide better prospects of controlling the review timeline (given the statutory time frames).

What merger control issues did you observe in the past year that surprised you?

The difficulties posed by the merger authorisation process (as shown by the outcomes of the Telstra/TPG Telecom and ANZ/Suncorp Bank decisions) and the limits on Tribunal review of a merger authorisation decision.