The consumer watchdog wants tougher merger laws to stop uncompetitive mergers that ultimately leave dominant firms in a position to jack up their prices.
Australian Competition and Consumer Commission chair Gina Cass-Gottlieb has taken up the mantle of her predecessor Rod Sims, who has long advocated for reforms to merger laws to encourage competition.
The merger reforms will ultimately prevent firms from dominating markets without competitive pressures that keep the prices consumers pay down.
Speaking at the National Press Club on Wednesday, Ms Cass-Gottlieb called for a model that would force merger parties to lodge takeover deals with the regulator for approval.
At the moment, if the ACCC believes a merger could result in a firm gaining too much market power, the regulator must take it to the Federal Court.
“We are finding that businesses are pushing the boundaries of the informal regime,” Ms Cass-Gottlieb said.
“Given that there are no up-front information requirements for an informal review, merger parties are increasingly giving us late, incomplete or incorrect information.”
The regulator also wants stronger wording in the merger law so it can stop “creeping acquisitions”, where a company makes multiple smaller acquisitions that aren’t anti-competitive in isolation but can add up.
Ms Cass-Gottlieb said this was particularly common in digital platform markets.
The existing phrasing also fails to adequately protect new entrants in markets already dominated by few major players.
She said most mergers were not harmful to competition and allowed firms to scale up and diversify into new areas, but some markets were “particularly vulnerable” to further consolidation.
“In particular, markets that already have large incumbents with positions of market power and markets where it is difficult for new rivals to enter,” she said.
– AAP
