Overview

The Trade Practices Act 1974 (Cth) contains the primary rules for the regulation of mergers which may have detrimental effects on competition in Australia. Australia also has rules which apply to mergers in specific industries, such as the media industry and the banking sector, as well as foreign investment rules.

Sections 50 and 50A of the Trade Practices Act regulate acquisitions of shares and/or assets. Section 50 is the key section. It prohibits mergers or acquisitions that would have the effect, or be likely to have the effect, of substantially lessening competition in a market in Australia.

The Trade Practices Act does not contain a mandatory pre-merger notiication process. In practice, however, virtually all mergers that affect, or could conceivably affect, competition in Australia are voluntarily notiied in advance of their completion to the Australian Competition and Consumer Commission (‘the Commission’ or ACCC). If the Commission considers a merger would be likely to substantially lessen competition then it may apply to the Federal Court of Australia to obtain orders to prevent the merger from completing.

Notiications to the Commission are made using either a formal or an informal merger clearance procedure. However, the formal merger clearance procedure has not yet been used and the Commission has expressed a clear preference for applicants to use the informal clearance procedure.