Competition and Consumer Act 2010 (Cth)
Acquisitions that occur outside Australia
(1) Where a person acquires, outside Australia, otherwise than by reason of the application of paragraph (8)(b), a controlling interest (the first controlling interest) in any body corporate and, by reason, but not necessarily by reason only, of the application of paragraph (8)(b) in relation to the first controlling interest, obtains a controlling interest (the second controlling interest) in a corporation or each of 2 or more corporations, the Tribunal may, on the application of the Minister, the Commission or any other person, if the Tribunal is satisfied that:
(a) the person’s obtaining the second controlling interest would have the effect, or be likely to have the effect, of substantially lessening competition in a market; and
(b) the person’s obtaining the second controlling interest would not, in all the circumstances, result, or be likely to result, in such a benefit to the public that the obtaining should be disregarded for the purposes of this section;
make a declaration accordingly.
(1A) Without limiting the matters that may be taken into account in determining whether the obtaining of the second controlling interest would have the effect, or be likely to have the effect, of substantially lessening competition in a market, the matters mentioned in subsection 50(3) must be taken into account for that purpose.
(1B) In determining whether the obtaining of the second controlling interest would result, or be likely to result, in such a benefit to the public that it should be disregarded for the purposes of this
(a) the Tribunal must regard the following as benefits to the public (in addition to any other benefits to the public that may exist apart from this paragraph):
(i) a significant increase in the real value of exports;
(ii) a significant substitution of domestic products for imported goods; and
(b) without limiting the matters that may be taken into account, the Tribunal must take into account all other relevant matters that relate to the international competitiveness of any Australian industry.
(2) Where an application under subsection (1)
(a) the Tribunal shall give to:
(i) each corporation in relation to which the application relates; and
(ii) the Minister and the Commission
a notice in writing stating that the application has been made; and
(b) the persons referred to in paragraph (a) and, if the application was made by another person, that other person are entitled to appear, or be represented, at the proceedings following the application.
(3) An application under subsection (1) may be made at any time within 12 months after the date of the acquisition referred to in that subsection in relation to which the application is made.
(4) The Tribunal may, on the application of the Minister, the Commission or any other person, or of its own motion, revoke a declaration made under subsection (1).
(5) The Tribunal shall state in writing its reasons for making, refusing to make or revoking a declaration under subsection (1).
(6) After the end of 6 months after a declaration is made under subsection (1) in relation to the obtaining of a controlling interest in a corporation or 2 or more corporations by a person or, if the person, before the end of that period of 6 months, makes an application to a presidential member for an extension of that period, after the end of such further period (not exceeding 6 months) as the presidential member allows, the corporation or each of the corporations, as the case may be, shall not, while the declaration remains in force, carry on business in the market to which the declaration relates.
(8) For the purposes of this section:
(a) a person shall be taken to hold a controlling interest in a body corporate if the body corporate is, or, if the person were a body corporate, would be, a subsidiary of the person (otherwise than by reason of the application of paragraph 4A(1)(b)); and
(b) where a person holds a controlling interest (including a controlling interest held by virtue of another application or other applications of this paragraph) in a body corporate and that body corporate:
(i) controls the composition of the board of directors of another body corporate;
(ii) is in a position to cast, or control the casting of, any votes that might be cast at a general meeting of another body corporate; or
(iii) holds shares in the capital of another body corporate;
the person shall be deemed (but not to the exclusion of any other person) to control the composition of that board, to be in a position to cast, or control the casting of, those votes or to hold those shares, as the case may be.
(9) In this section:
market means a substantial market for goods or services in Australia, in a State or in a Territory.
Allan Fels, Sharon Henrick and Martyn Taylor, ‘Australia’ in Maher Dabbah and Paul Lasok QC, ‘Introduction’ in Maher Dabbah and Paul Lasok QC (eds), Merger Control Worldwide (2nd edn, Cambridge University Press, 2012) 78 at 83 discuss this provision and observe that:
‘Section 50A is a curious provision which has never been tested by a court. It was designed to overcome situations where the Trade Practices Act would not have sufficient extraterritorial reach to apply to offshore acquisitions where the acquirer is neither incorporated in Australia, nor a registered foreign corporation in Australia, nor carrying on business in Australia, but which would be likely to substantially lessen competition in Australia. It is subject to a non-overlap provision which states that where an acquisition is subject to sections 50 and 50A, the acquisition shall be subject to section 50. ... that there are very limited circumstances where section 50A will apply. …’ [footnotes omitted]