Mergers, counterfactuals and proof after Metcash

Cento Veljanovski
(2012) 40 Australian Business Law Review 263

Abstract

'The standard of proof required in merger cases has become the centre of considerable controversies and confusion following the Federal Court's and Full Federal Court's decisions in Metcash. This article reviews the use of counterfactuals and the inherent contradictions in adopting the real chance standard of proof. It also critically examines the different approaches of the judgments in Metcash, and the more formal approach by the New Zealand High Court in the Warehouse decision. This is assessed using probability theory. The discussion points to the adoption of the balance of probabilities as the requisite standard of proof, and a watering down of the counterfactual in preference to a more direct approach to merger assessments.'