Creeping acquisitions and price signalling amendments passed
In its last two sitting days for 2011, the Senate has passed two key bills which amend the Competition and Consumer Act 2010 (Act).
The Competition and Consumer Legislation Amendment Bill 2011 was today passed by the Senate without amendment. The Bill has been touted as giving the ACCC the ability to block small acquisitions which may not individually contravene section 50 but have the cumulative effect of substantially lessening competition in a market. These “creeping acquisitions” have been of particular concern in the supermarket, petrol and banking sectors.
The Bill amends section 50 of the Act to prohibit mergers that result in a substantial lessening of competition in any market in Australia. Currently, section 50 is limited to mergers that result in a substantial lessening of competition in a substantial market in Australia.
One of the Rudd Government’s election promises was to amend the creeping acquisitions legislation “as a matter of urgency”. Four years later, the amendments finally passed do not make substantive changes to section 50 and merely clarify the ACCC’s current approach to merger analysis. It will nevertheless be interesting to see how the new provisions assist the ACCC, particularly given the hints by new chairman Rod Sims that closer scrutiny may be applied to supermarkets.
The amendments will commence no later than two months after the Bill receives Royal Assent.
The Government’s price signalling legislation was last night passed without amendment in the Senate. The Competition and Consumer Amendment Bill (No 1) 2011 introduces amendments to the Act which prohibit pricing and related disclosures that fall short of price fixing under the current cartel provisions but are considered to have a comparable effect.
Although the new prohibitions are targeted at the banking sector, the Government has expressly left open the possibility of extending the prohibitions to other industries by making subsequent amendments to the competition regulations.
The legislation will commence six months from the date of Royal Assent.