ACCC chief Rod Sims urges merger laws overhaul to ensure healthy competition

Australia’s merger laws and how it deals with digital platforms need to be addressed to protect the Australian economy, according to Australian Competition and Consumer Commission (ACCC) chair Rod Sims.

In a speech to an ACCC and University of South Australia-hosted competition law and economics workshop, Sims said the main competition issues needed to address in Australia are merger law reform, the need to prove the future in competition cases, and the role of new regulation for digital platforms.

“Merger control is critical to protecting and promoting competition. It is the gatekeeper, protecting us from the negative effects of increases in concentration,” Sims said.

“If we are serious about protecting competition in this country, we must ensure our merger control regime works as effectively as possible, and that it is consistent with international best practice.”

The Australian IT channel has had its fair share of consolidation in the past few years, with boutique specialist resellers gobbled up by global system integrators like the big four consulting firms (Deloitte, EY, KPMG and PwC), publicly-listed firms acquiring smaller MSPs to grow the business, as well as smaller mergers or acquisitions between resellers.

Sims said the ACCC had heard differing views on merger reform laws after his speech to the Law Council of Australia in August this year. “We are hearing a range of views both for and against various elements of our proposals and about the need for reform,” he said.

Sims also pointed to the ACCC’s need to prove the likely future state of competition in merger court cases and cases involving anti-competitive conduct.

“The fundamental issue is that when applying our ‘substantial lessening of competition’ test in merger cases and other competition cases, the approach taken by the courts currently requires the ACCC to prove what is likely to happen in the future, rather than considering the overall interference to the competitive process which will be caused by the acquisition of a key player by its closest competitor or by other anti-competitive behaviour,” he said.

“In my view, the effectiveness of our competition laws is at stake.”

Information gathering, 'inappropriate' time pressure and external threats were also some of the agency’s challenges it encounters when reviewing merger cases on a day to day basis.

“Increasingly we are having difficulty getting the information we need to conduct our merger assessments. We are also put under inappropriate time pressure, and we face threats to complete. We are also hearing of more mergers only shortly before they are to complete,” Sims said.

“Indeed, ACCC Commissioners observe that the approach of companies to Australia’s merger processes is sometimes contemptuous.”