Competition and Consumer Act 2010 (Cth)
Simplified outline of this Division
This Division is about merger clearances and merger authorisations.
It relates to section 50: that section prohibits a person acquiring shares in the capital of a body corporate or assets of another person if the acquisition would have, or be likely to have, the effect of substantially lessening competition in a market. If a person has a clearance or authorisation for the acquisition, section 50 will not prevent the person from making the acquisition.
The main differences between merger clearances and authorisations are:
- different bodies decide whether they should be granted;
- different timeframes apply for when the body must make its decision;
- they have different tests that need to be satisfied for them to be granted;
- merits review is not available for decisions on authorisations.
For merger clearances (see Subdivision B):
- the Commission grants them;
- it must make its decision whether to grant within 40 businessdays (which can be extended if the applicant agrees or the Commission so decides), and if it does not, the application is taken to be refused;
- it cannot grant the clearance unless it is satisfied that the acquisition would not have the effect, or be likely to have the effect, of substantially lessening competition in a market;
- if it refuses to grant a clearance, or grants a clearance subject to conditions, then the person who applied for the clearance may apply to the Tribunal under Division 3 of Part IX for review of the Commission’s decision.
For merger authorisations (see Subdivision C):
- the Tribunal grants them;
- it must make its decision whether to grant within 3 months (which can be extended to 6 months in special circumstances), and if it does not, the application is taken to be refused;
- it cannot grant the authorisation unless it is satisfied that the acquisition would result, or be likely to result, in such a benefit to the public that the acquisition should be allowed to take place.
Subdivision D contains a prohibition on providing false or misleading information to the Commission or Tribunal under this Division or Division 3 of Part IX.
Division 3 of Part VII of the Act was introduced in 2006 following recommendations by the Dawson Committee. The Division allows parties to apply for 'formal clearance' of their mergers and provides that merger authorisation applicatons proceed directly to the Australian Competition Tribunal, rather than the ACCC at first instance with the opportunity of appeal to the Tribunal.
See mergers page.