Are Australia’s proposed merger control fees too high?

On 5 June 2025, the Australian Competition and Consumer Commission (ACCC) and Treasury released a Consultation Paper detailing a proposed cost recovery fees framework for Australia’s new merger regime, which will commence on a voluntary basis on 1 July 2025 and a mandatory basis on 1 January 2026.

The proposed fees will substantially increase the costs of obtaining merger clearance in Australia. To more accurately reflect the ACCC’s costs, the fees will be tiered based on the complexity of the review, rather than the size of the deal. The proposed Phase 1 fees are set at a level which is similar to other comparable jurisdictions that have separate Phase 1 fees. But the fees for Phase 2 reviews are almost 20 times higher than the Phase 1 fees and are inconsistent with, and substantially higher than, fee levels in comparable jurisdictions. In total, the fees for a Phase 2 review would be over a million Australian dollars, raising concerns about lower-value transactions being deterred by cost concerns.

Proposed fees

The proposed fees for FY 2025-26 (which are proposed to be indexed annually and which will not attract GST) are set out in the below table:

Acquisitions by small businesses with aggregated turnover of less than A$10 million will be exempt from the above fees.

Key implications

These are the key implications in our view:

• Phase 1 fees are too rigid to account for a broad range of simple review types. Phase 1 fees are higher than some international comparators, but they are broadly consistent with many others. That said, the approach adopted may be too inflexible for pure ‘process’ filings caught by notification thresholds but not raising any substantive issues. The approach adopted in Germany to Phase 1 fees may be preferable. The German agency has some discretion to set Phase 1 fees based on the complexity of the review, the size of the merger parties, and the importance of the transaction. This results in many high-value, low-complexity transactions attracting fees of around €5-15,000 (or around half the currently proposed Phase 1 fees in Australia).
  

• Disproportionate impact of Phase 2 fees on smaller transactions. The proposed fees reflect, in part, the Government’s decision in the FY 2024-25 budget to shift merger review cost recovery from taxpayers to businesses.[1] The operational cost of the ACCC’s current merger control regime is funded through consolidated taxpayer revenue,[2] but Government will shift these costs onto notifying parties under the new merger regime. According to the Consultation Paper, Treasury has determined the fees by dividing the total cost incurred for each type of review by the estimated volume of assessments per year.[3] The following issues arise:
  
  
  • Phase 2 fees are significantly higher than the fees levied in comparable jurisdictions (save for the US, which imposes substantially higher fees on transactions valued of over US$3 billion). The proposed Phase 2 fees are significantly higher than comparable fees levied in the UK, Germany, Canada, India, the Netherlands, Singapore and Spain, among others.
    
    
  • These very high proposed Phase 2 fees will disproportionately impact smaller merger parties and transactions, for which the fees will represent a greater proportion of the transaction value. In our review of comparable jurisdictions’ fee structures, the majority of agencies that levy fees at the higher end typically base those fees on transaction value and turnover, not complexity, to avoid this risk. Examples include the US, the UK, Denmark, Singapore and Spain.
    
    
  • There is a real risk that inflexible risk-based fees of this magnitude may result in the smaller transactions being withdrawn when they are pushed into Phase 2 reviews (or deterred entirely by the prospect of Phase 2 fees), even if competition concerns ultimately do not arise or could be resolved. This is particularly likely to occur in transactions affecting real estate interests in local markets, such as acquisitions of retail, fuel, childcare and healthcare sites. The prospect of increasing incentives to withdraw smaller-value transactions is likely to promote strategic behaviour from incentivised third parties, who may raise competition concerns that are ultimately unfounded but that need to be worked through in-depth by the ACCC.
    
    
  • The high Phase 2 fees may also mean that parties feel the need to engage in increasingly lengthy prenotification processes and to agree to greater numbers of Phase 1 extensions, in order to avoid the risk of their deals being ‘tipped’ into a Phase 2 review and a requirement to pay a substantial additional sum to complete their ACCC processes. Similarly, the ACCC is likely to be incentivised to push more deals into Phase 2 rather than permitting protracted Phase 1 reviews that seek to circumvent the fee structure.
    
    
• Total notification numbers are significantly underestimated. The Consultation Paper identifies that Treasury is anticipating 100 notification waivers, 335 Phase 1 reviews, 15 Phase 2 reviews and 3 Public Benefit reviews in FY 2025-26. Although hard to predict, this may be a substantial underestimate, noting that under the current voluntary regime the ACCC received more than 400 notifications in each of FY2021 and FY2022, and the ten-year average number of notifications is around 330. Under-estimation of review numbers is likely to inflate filing fees (by reducing the denominator used to divide total review costs) and increase the risk of under-resourcing and friction in the early stages of the new merger regime. Additionally, the five-year average number of phase 2 reviews is around 7.5 per financial year. The above numbers show that the ACCC and Treasury are anticipating around double that number in the first financial year of the new regime’s operation. This is particularly concerning for merger parties, because it tends to indicate that the ACCC and Treasury are anticipating that significantly more transactions may be ‘tipped’ into Phase 2 reviews under the new regime, which has a very low threshold for the ACCC to open a second-phase investigation.
  
  
• Indexation and review. It is welcome that fees will be reviewed and indexed annually (as they are in the US and Canada, among others). We agree that all aspects of the efficacy of the new regime should be assessed regularly and the ACCC should have close regard to the effect of any fees on merger parties, including by tracking transaction withdrawals at the opening of Phase 2 reviews. In addition to assessing whether the fees are sufficient (or excessive) to cover the ACCC’s actual merger review costs, the ACCC should assess whether its merger review function is efficient and provides value-for-money – many other competition agencies around the world review greater numbers of mergers than the ACCC with a mere fraction of the resourcing that is presently allocated to its mergers division
  

Treasury has invited interested parties to comment until 18 June 2025 and intends to enact a fees legislative instrument before 30 June 2025.

^{[1]The Commonwealth of Australia, Merger Reform - Cost Recovery Fees, Consultation paper 5 June 2025, p2. (Consultation paper)}

^{[2] While there is a A$25,000 fee for merger authorisations, only seven notifications have been made since 2017 (Consultation paper, p2).}

^{[3] Consultation paper, p14.}