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About mergers in Australia


In Australia mergers are prohibited if it can be demonstrated that they will have the effect or likely effect of substantially lessening competition in a market (section 50 CCA). It is possible to obtain clearance (formal or informal) or authorisation for proposed mergers, but there is no mandatory notification process.

Clearance will be granted only if the ACCC does not believe the merger will SLC (s 95AN). Authorisation, on the other hand, may be granted by the Australian Competition Tribunal even where the merger will SLC if it can be demonstrated that the merger would lead to such a benefit to the public that it should be allowed to occur (s 95AZH).

Section 50A deals with mergers occurring outside Australia.

Harper Review update: The Harper Review Final Report recommends some changes to the merger review clearance and authorisation processes; most notably it recommends combining the formal clearance and the authorisation process. See my overview of the final proposals (PDF) and the comparison between draft and final proposals. The government has accepted the recommendations relating to mergers and will develop 'exposure draft legislation for public consultation on changes to the formal merger review process, in consultation with business, competition law practitioners, the ACCC and states and territories.'

The prohibition

Section 50 of the Competition and Consumer Act 2010 prohibits the direct or indirect acquisition of shares or assets where the acquisition would have, or be likely to have, the effect of substantially lessening competition in any market.


There is no requirement that a controlling interest be acquired and asset acquisitions alone are sufficient where it will produce an anti-competitive effect. Consequently, for example, acquisitions of land, intellectual property rights or other non-controlling interests which produce the necessary anti-competitive result may be caught.

The counterfactual and the substantial lessening of competition test

The legal standard

The current substantial lessening of competition test has applied since 1992. There have, however, only been two Federal Court decisions applying the provision and there is no High Court authority. The necessary level of proof required to demonstrate a proposed merger would substantially lessen competition is unclear following the Full Federal Court's decision in Metcash.

Before an assessment can be made about whether a merger is likely to substantially lessen competition, it is necessary to assess what is likely to happen in the future both with and without the merger (the counterfactual or “future without” and “future with” tests). At trial in Metcash Justice Emmett considered that it was necessary for the ACCC to establish 'on the balance of probabilities' what the 'future state of the market will be, both with and without the proposed acquisition' (para 145), but that if this can be established then it is sufficient to demonstrate that there is a 'real chance' that the proposed acquisition would result in a substantial lessening of competition (para 146). Relying on the decision in AGL at [348] Justice Emmett noted that (at para 136) 'does not encompass mere possibility' but requires assessment 'at a level that is commercially relevant or meaningful'. In Metcash the ACCC had argued multiple counterfactuals and Justice Emmett concluded they were not entitled to succeed unless the Court finds (para 146):

  • that it is more probable than not that one of the Commission’s counterfactuals will come to pass if the proposed acquisition does not proceed; and
  • that there is a real chance that, if the proposed acquisition does proceed, that would result in a substantial lessening of competition compared to the scenario in which one of those counterfactuals comes to pass.

On appeal to the Full Federal Court, Justice Buchanan disagreed with the trial judge, noting that, in his view, the 'real chance' test should not be applied at all to the application of s 50 [at para 25], instead expressing the view that it is necessary to establish likely substantial lessening of competition 'on the balance of probabilities' (para's 35 and 40). In separate judgments, the two other Federal Court judges did not reach a concluded view on the matter.

Matters to consider

Section 50(3) requires the court to consider a non-exhaustive list of factors when assessing whether or not a proposed acquisition is likely to substantially lessen competition. They are:

(a) the actual and potential level of import competition in the market;

(b) the height of barriers to entry to the market;

(c) the level of concentration in the market;

(d) the degree of countervailing power in the market;

(e) the likelihood that the acquisition would result in the acquirer being able to significantly and sustainably increase prices or profit margins;

(f) the extent to which substitutes are available in the market or are likely to be available in the market;

(g) the dynamic characteristics of the market, including growth, innovation and product differentiation;

(h) the likelihood that the acquisition would result in the removal from the market of a vigorous and effective competitor;

(i) the nature and extent of vertical integration in the market.

The market

Subsection 50(6) provides that:

market means a market for goods or services in:

(a) Australia; or

(b) a State; or

(c) a Territory; or

(d) a region of Australia.

In addition, section 4E states:

For the purposes of this Act, unless the contrary intention appears, market means a market in Australia and, when used in relation to any goods or services, includes a market for those goods or services and other goods or services that are substitutable for, or otherwise competitive with, the first‑mentioned goods or services.

Although territorially defined, there is case law in relation to other competition law provisions that suggests a global or regional market may be a market for purposes of section 4E: Singapore Airlines Ltd v Australian Competition and Consumer Commission [2009] FCAFC 136 (2 October 2009). Given the existence of s 50(6) it is unclear whether or not such a broad market may be defined for purposes of the merger provision. However, even if a global market is artificially contained to Australia, the competition analysis will enable this to be assessed in the broader global context.

The Courts have recently emphasised the need for market definition to 'reflect commercial reality, rather than be driven by economic theory' (Justice Buchanan in Metcash para 10)


There is no compulsory pre-merger notification regime in Australia. However, parties are encouraged to notify the ACCC when mergers exceed certain market share levels.

Informal notification

Parties to mergers having the potential to raise competition concerns generally 'informally' notify the ACCC of the merger and usually will not close during this time. The ACCC may

  • indicate it will not challenge the merger
  • indicate it will oppose the merger
  • indicate it will provide clearance subject to the provision of court enforceable undertakings designed to alleviate competition concerns.

Statistically about 4-5% of notified mergers raise competition concerns.

Parties are assisted by the provision of Merger Guidelines, both for substantive analysis and procedure. The ACCC publishes public competition assessments for mergers which are opposed or are otherwise of public interest (see merger cases page).

Formal notification

If the ACCC indicates it will not challenge a merger this does not mean that a third party cannot challenge the merger (third parties do not have the power to seek an injunction to prevent a merger but may seek remedies against parties to a concluded merger where they can establish that the merger contravenes s 50).

To enable parties to obtain greater security a formal notification regime option was introduced in 2007. Clearance under the formal process will preclude third parties from subsequently challenging the merger. To date there have been no applications under the formal notification procedure.


Parties may seek authorisation for an acquisition. This must occur before the acquisition takes place. In relation to most competition law provisions it is the ACCC which determines authorisation applications. Historically this was also true of mergers. However, since 2007, this power has shifted to the Australian Competition Tribunal. Authorisation must not be granted unless the Tribunal is satisfied that the acquisition is likely to result in such benefit to the public that it should be allowed. The Tribunal must consider as benefits:

  • significant increase in the real value of exports
  • significant substitution of domestic products for imported goods
  • all matters relevant to the international competitiveness of any Australian industry

Other factors may also be considered.

There have now been three applications for merger authorisation since the power shifted to the Tribunal. The first application was withdrawn before being heard: see Application by Murray Goulburn Co-Operative Co Limited for Merger Authorisation. The second was made on 24 March 2014 by AGL in relation to a proposed acquisition of Macquarie Generation. On 25 June 2014 the Tribunal granted authorisation for the proposed acquisition. The third application was by Sea Swift Pty Limited in relation to a proposed acquisition of certain Toll Marine Logistics assets; this application was made and withdrawn in 2015.

Penalties and remedies

Application may be made to the Court for the following:

  • Injunction (ACCC only; not private parties) (section 80)
  • Pecuniary penalties for breach (section 76)
  • Divestiture (section 81)
  • Damages (by persons who suffer loss and damage as a result) (six year limitation period) (section 82)
  • Disqualification from directorship (section 86E)
  • Non-punitive orders (such as community service order) (section 86C)
  • Other orders (Court may make 'such orders as it thinks appropriate' (section 87)

In addition, the ACCC may accept enforceable undertakings pursuant to s 87B. These are utilized by the ACCC to alleviate competition concerns in some merger cases.

Note that the ACCC has no power to block a merger; this power resides solely with the Federal Court of Australia.

Section 50A

Section 50A applies where the acquiring corporation is foreign and does not carry on business in Australia. In practice the extraterritorial breadth of s 50 is wide enough to capture more mergers involving foreign corporations with the result that s 50A is not used in practice.


History of merger regulation in Australia

The original Trade Practices Act 1974 applied a substantial lessening of competition test - specifically, it prohibited the acquisition of assets and shares, which resulted in a substantial lessening of competition in a market for goods or services.

In 1977 the substantial lessening of competition test was replaced with a market dominance test by the Trade Practices Legislation Amendment Act 1977. As a result, acquisitions were only prohibited where they resulted in or substantially strengthened a ‘position to control or dominate a market’. This was (generally) considered a higher threshold so that less mergers were captured.

In 1989, the House of Representative Standing Committee on Legal and Constitutional Affairs (the Griffiths Committee) recommended retaining the dominance test in its report ‘Mergers, Takeovers and Monopolies: Profiting From Competition?’.

Shortly thereafter, however, the Senate Committee on Legal and Constitutional Affairs (the Cooney Committee). It recommended that the test in s 50 be lowered to prohibit acquisitions or mergers that substantially lessen competition in a market. This change was introduced by the Trade Practices Legislation Amendment Act 1992 which also introduceda non-exhaustive list of matters to be considered by the Courts when determining if a merger substantially lessened competition (s 50(3))

In 2002, numerous submissions were made to the Dawson Committee recommending that the substantive test for mergers change back to one of dominance, incorporate an ‘efficiency’ test or incorporate a public benefit test. The Dawson Committee recommended that the substantive test of ‘substantial lessening of competition’ be retained.  This was accepted by the government and no legislative change has been made to the substance of the prohibition.

The Dawson Committee did, however, make recommendations relating to merger clearance and authorisation processes that were introduced by the Trade Practices Legislation Amendment Act (No 1) 2006. For more details on the Committee's discussion of mergers and the submissions made to the Committee relating to mergers see:   Julie Clarke, 'The Dawson Report and Merger Regulation' (2003) 8(2) Deakin Law Review 245

Following a push for the introduction of provisions to deal with creeping acquisitions, a bill was introduced in 2010 which would have made minor amendments to s 50 - the bill lapsed at the end of Parliament in 2010, but was re-introduced in 2011 and became the Competition and Consumer Legislation Amendment Act 2011. This Act made the following changes:

(1) replace the words 'a market' in section 50(1) with 'any market'

(2) Remove the requirement that a market, for purposes of the merger provision, be a 'substantial' market, by removing the word substantial from subsection 50(6)

At the Competition Law Conference 2013 ACCC Commissioner, Jill Walker and ACCC Executive General Manager (Legal Group), Tim Grimwade presented a seminar entitled Mergers: A 20 year retrospective, providing an overview of the development of merger law and enforcement in Australia. The PowerPoint presentation is available here.


The Law


Merger Guidelines

Although there is no mandatory reporting obligation for proposed mergers in Australia, parties proposing to merge generally do notify the ACCC when proposing to merge and rely upon both the analytical and process guidelines produced by the ACCC to inform this process. For details of current and historic merger guidelines in Australia see the merger guidelines page.

The current applicable guidelines for mergers in Australia are:

ACCC Merger Guidelines (November 2008)
Final Analytical Guidelines released 21 November 2008 and replace the 1999 Guidelines

ACCC Formal Merger Process Guidelines (June 2008)

ACCC Merger Review Process Guidelines (2013)

See also Peter Campbell, 'New ACCC Merger Process Guidelines' (July 2013)

Media Mergers (August 2006)
Guidance on approach to media mergers


Cases relating to mergers

View merger cases page for further cases and informal clearance decisions.


Tribunal (authorisation applications)

Federal Court


Articles/books/thesis relating to mergers




Dawson Committee Report - Chapter on Mergers (2003)

Merger Regulation: A review of the draft merger guidelines administered by the Australian Competition and Consumer Commission (1996)
Report of the Industry Commission

Cooney Committee Report (1991)
Mergers, Monopolies & Acquisitions

Griffiths Committee Report (1989)
Mergers, Takeovers and Monopolies: Profiting from Competition?
Report of the House of Representatives Standing Committee on Legal and Constitutional Affairs



New Zealand

United States


OECD Reports

OECD - Report on Notification of Transnational Mergers (1999)

OECD Policy Roundtables

OECD Policy Rountables: Market Definition (2012) DAF/COMP(2012)24 (11 October 2012)

OECD Policy Rountables: Impact of Evaluation of Merger Decisions (June 2011) DAF/COMP(2011)24 (18 September 2012)

OECD Policy Roundtables: Economic Evidence in Merger Analysis DAF/COMP(2011)23 (27 July 2012)

OECD Policy Roundtables: Remedies in Merger Cases DAF/COMP(2011)13 (30 July 2012) (Roundtable No 125)

OECD Policy Roundtables: Cross-Border Merger Control: Challenges for Developing and Emerging Economies DAF/COMP/GF(2011)13 (2011) (Roundtable No 122)

OECD Policy Roundtables: Failing Firm Defence (DAF/COMP(2009)38) (2009) (Roundtable No 103)

OECD Policy Roundtables: The Standard for Merger Review, with a Particular Emphasis on Country Experience with the change of Merger Review Standard from the Dominance Test to the SLC/SIEC Test (DAF/COMP(2009)21) (2009) (Roundtable No 102)

OECD Policy Roundtables: Competition Policy, Industrial Policy and National Champions (DAF/COMP/GF(2009)9) (2009) (Roundtable No 96)

OECD Policy Roundtables: Managing Complex Mergers (DAF/COMP(2007)44) (2007) (Roundtable No 83)

OECD Policy Roundtables: Dynamic Efficiencies in Merger Analysis (DAF/COMP(2007)41) (2007) (Roundtable No 77)

OECD Policy Roundtables: Vertical Mergers (DAF/COMP(2007)21) (2007) (Roundtable No 68)

OECD Policy Roundtables: Merger Remedies (DAF/COMP(2004)21) (2004) (Roundtable No 48)

OECD Policy Roundtables: Media Mergers (DAFFE/COMP(2003)16) (2003) (Roundtable No 44)

OECD Policy Roundtables: Substantive Criteria Used for the Assessment of Mergers (DAFFE/COMP(2003)5) (2003) (Roundtable No 42)

OECD Policy Roundtables: Merger Review in Emerging High Innovation Markets (DAFFE/COMP(2002)20) (2002) (Roundtable No 20)

OECD Policy Roundtables: Portfolio Effects in Conglomerate Mergers (DAFFE/COMP(2002)5) (2001) (Roundtable No 37)

OECD Policy Roundtables: Mergers in Financial Services (DAFFE/CLP(2000)17) (2000) (Roundtable No 29)

OECD Policy Roundtables: Airline Mergers and Alliances (DAFFE/CLP(2000)1) (2000) (Roundtable No 26)

OECD Policy Roundtables: Efficiency Claims in Mergers and Other Horizontal Arrangements (OCDE/GD(96)65) (1995) (Roundtable No 4)

OECD Policy Roundtables: Failing Firm Defence (OCDE/GD(96)23) (1995) (Roundtable No 2)


International Merger Guidelines and Best Practices

See also my site on International Merger Law

New Zealand

United Kingdom

OFT/CC Review of Merger Guidelines (initiated 2008; includes links to Guidelines)

United States

Pre-Merger/Hart-Scott-Rodino Act (resources from FTC)

Horizontal Merger Guidelines (August 2010 from DOJ site)

Horizontal Merger Guidelines (August 2010, PDF from FTC site)

Horizontal Merger Guidelines (April 1992, PDF from FTC; now replaced by 2010 Guidelines)

Horizontal Merger Guidelines (April 1992 from DOJ; now replaced by 2010 Guidelines)

Commentary on Horizontal Merger Guidelines (2006 Commentary on 1992 Guidelines - from DOJ site)

DOJ - Antitrust Division Policy Guide to Merger Remedies (June 2011)

DOJ Policy Guide to Merger Remedies (2004) (replaced by 2011 guide)


Deborah L Feinstein, 'The Revised Merger Guidelines: Did the Agencies Heed the Lessons of the Past?', The Antitrust Source, (October 2010)




Useful links

International Competition Network - Mergers Working Group

ICN Database - Merger Review Laws, Related Materials, and Templates

International Merger Law
My merger page

Merger Remedies Matrix
Concurrences (Institute of Competition law) - Cases and Reports on merger remedies in Europe

Merger Streamlining Group
Group of multinational firms 'interested in ensuring that the merger review regimes ... operate effectively and efficiently and do not impose undue compliance burdens.'