Reports
Griffiths Report 1989
Mergers, Takeovers and Monopolies: Profiting from Competition?
Report of the House of Representatives Standing Committee on Legal and Constitutional Affairs
Length: 136 pages
Summary and Key Recommendations
Key recommendations
(1) Improved economic data - that the TPC and Aust Burau of Statisticcs establish 'a minimal set of line-of-business data' for use by the TPC and private researchers. ABS should also use information to update and publish industry concentration statistics.
(2) Misuse of market power - section 46 should be retained in current form - TPC should issue guidelines on the operation of s 46 'having regard to the HIgh Court decision' in Qld Wire.
(3) Mergers - Notification - recommend against the introduction of pre-merger notification (noting this would have significant resource implications for the TPC)
(4) Mergers - Dominance test - dominance tst should be retained: '... the existing provisions of section 50 ... prohibiting acquisitions which result in or substantially strengthen a position of dominance in a substantial market be retained.'
(5) Mergers - Private injunctive relief - '... the private right to injunctive relief in relation to mergers [should] be re-introduced ... but that takeover targets and associated persons should be excluded from this right.' (this would allow resources other than the TPC's to be directed toward enforcing existing provisions)
(6) Mergers - Modified approach - AG should give a direction that the TPC 'continue its policy of giving emphasis to the authorisation process in mergers witht eh potential for market dominance, to ensure that the process of assessing net public benefit is exposed to public scrutiny'.
(7) Mergers - Legislative recognition of consultation process - TPA 'should be amended to provide legislative recognition of the informal consultative process currently utilised by the [TPC] in relation to mergers.
(8) Mergers - Authorisation - existing procedure for merger authorisation should be retained (there is sufficient opportunity for public scrutiny)
(9) Mergers - Undertakings - TPA should be amended to provide remedies for breaches of uncertakings in connection with merger authorisations and in relation to 'the recommended legislatively recognised merger consultative process'.
(10) Mergers - Disclosure of information - TPC should 'extend the use of its public register for merger authorisations to cover all merger matters' considered by the TPC (subject to appropriate confidentiality restrictions) and should be made within 12 months unless excluded for sensitivity reasons.
(11) Mergers - Liaison with other agencies - AG should develop 'appropriate procedurs to imrove co-ordination between the TPC and other regulatory agencies' in relation to mergers.
(12) TPC - Pro-activity - TPC should 'maintain a pro-active approach to the regulation fo the merger and misuse of market power provisions' of the TPA.
(13) TPC Resources - cost recovery measures should be 'introduced in relation to the costs incurred in the administration and enforcement of the merger provisions'.
(14) TPC Resources - TPC should be provided with sufficient resources to enable maintenance of pro-active approach
(15) Forum for resolution - Role of Federal Court re: Part IV should be retained, but AG should adopt procedures to enhance effectiveness; options suggested included (a) enabling Court to refer economic issues to the Tribunal with 'associated streamlining of Tribunal's procedures' (b) 'relaxation of the rules of evidence in relation to economic issues considered by the Court' and (b) 'use of assessors by the Court'.
(16) Remedies - There should be a 'substantial increase in the existing maximum pecuniary penalty in relation to breaches of the merger and misuse of market power provisions' and a 'range of other appropriate remedies' should be introduced for Part IV contraventions and the Court should be 'provided with broader discretionary powers in relation to the range and level of penalties which may be imposed for Part IV contraventions'.
(17) Future Review - AG should initiate further review of merger and misuse of market power provisions within 5 years.
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Key statements
Forthcoming
Terms of reference
'To examine and inquire into the adequacy of existing legislative controls over mergers, takeovers and monopolisation with particular reference to:
(1) the extent of control of mergers, takeovers and monopolisation necessary to safeguard the public interest;
(2) adequacy of existing legislation
(3) the role and effectiveness of the Trade Practices Commission in its implementation of Sections 46 and 50 of the Trade Practices Act 1974.
Membership
Alan Griffiths MP (Chairman)
Philip Ruddock MP (Deputy Chairman)
Hon A E Adermann MP
Mr D E Charles MP
Mr P R Cleeland MP
Mr D J Kerr MP
Mr P J McGauran MP
Hon J C Moore MP
Mr P K Reith
Hon G G D Scholes MP
Mr W L Smith MP
Mr R E Tickner MP
Mr K W Wright MP
Submissions and meetings
76 written submissions were received and additional evidence was taken.
Legislative changes
Forthcoming