A Facelift For The Merger Authorisation Process Following The Passing Of The Dawson Bill

The Trade Practices Act 1974 (the Act) will finally undergo a drastic facelift after The Dawson Bill (the Bill) was passed by Federal Parliament. It is expected to become law in early 2007.

Among other amendments, the Bill has introduced changes to the provisions in the Act which deal with the powers of the Australian Competition and Consumer Commission (ACCC) and Australian Competition Tribunal (Tribunal) to process merger clearances and authorisations.

The passing of the Bill provides for greater accountability, transparency and timeliness in the decision-making of the ACCC and the Tribunal and reduces the regulatory burden on businesses which would like to merge.

The new provisions will include the following effects:

Formal Merger Clearance Applications

The ACCC will now have the power to determine whether to grant formal clearance to proposed merger or acquisition applications brought before it.

The new formal clearance system is a voluntary one and allows the ACCC 40 business days to assess the validity of a proposed merger or acquisition and determine whether it is likely to effect or substantially lessen competition.

In special cases, the ACCC may extend the time to review an application for clearance to 60 days.

This new formal system will enable companies to obtain a more timely and efficient clearance of a proposed merger or acquisition. It will provide the certainty of legislated time limits, require the disclosure of reasons, allow the applicant to appeal to the Tribunal and provide immunity from legal action should the clearance be granted.

Tribunal Authorisations

The Tribunal will also have increased powers under the new provisions.

Among other incidental powers, applications for authorisation of mergers and acquisitions on public benefit grounds will now be able to be brought directly before the Tribunal for review and bypass the ACCC.

The new amendments also provide the Tribunal with the power and greater flexibility procedurally to review ACCC decisions and to grant their own authorisations in a timely manner.

Joint Venture Exemptions

The new amendments also aim to widen the joint venture exemptions in the Act. Allegations of price-fixing or exclusionary provisions (boycotts) by genuine joint ventures will now be able to be defended by claims that the conduct does not substantially lessen competition. Previously, such conduct was strictly prohibited.

With the Bill passed, the Government will now focus it's energies to introducing a second Bill, making further changes to the Trade Practices Act with respect to misuse of market power provisions and unconscionable conduct provisions..

gadens lawyers will keep you updated on any news and events concerning these future changes.

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