Upcoming changes to Competition Law

Last week, the Federal Treasurer announced that the Australian Competition and Consumer Commission (ACCC) will proceed with drastic reforms to merger laws in an effort to revive competition.

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Overview

• Reforms to merger laws come into effect from 1 January 2026.
• The reforms will capture a greater range of transactions.
• Businesses should be conscious of any implications for current and future conduct.

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ACCC approval to be mandatory in certain transactions

Australia’s merger laws are adopting an administrative model, which means that certain transactions will require ACCC approval before they proceed.

After the change is implemented, ACCC approval will be required where:

1. Transactions where either party has an annual revenue of $400 million or more;
2. Transactions where either party has a global transaction value of $35 million or more; and
3. Transactions where parties’ combined market share exceeds a particular threshold.

The first two options are relatively straight-forward. The final option is more ambiguous and likely to capture a greater range of transactions, including acquisitions involving businesses with lower revenue, whose combined market share threatens competition in a particular market. The ACCC will issue guidance to assist businesses to determine whether they fall within this category.

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How will the approval system work?

If the ACCC considers that a transaction does not raise any competition concerns, the transaction may be approved within 30 business days, with the option of ‘fast-track’ determination after 15 business days in some cases.

The ACCC estimates that most transactions will either not require approval (due to being below the threshold) or will be able to proceed within three to six weeks.

Where a transaction raises competition concerns, the ACCC will undertake a thorough assessment within four-and-a-half months. If approval is refused, the transaction will be prohibited from proceeding.

These changes increase the risks to the timing and ultimate completion of a much broader range of transactions, and clients dealing in M&A or other business transactions should obtain legal advice on whether they require ACCC approval.

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ACCC to consider prior, ‘serial’ acquisitions

From 1 January 2026, the ACCC will consider all acquisitions involving a business within the preceding three years (i.e., from 2023 onwards) to determine whether a proposed acquisition exceeds a set threshold and requires ACCC approval to proceed. This means that businesses’ conduct now may have consequences later. We recommend that businesses contemplate the market share implications of all current and future acquisitions in the context of the ACCC’s increased powers post-2026.

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Important notes

• The ACCC will not have a general power to review acquisitions below the set thresholds.
• The onus will remain on the ACCC. That is, an acquisition may proceed unless the ACCC reasonably believes it is likely to substantially lessen competition in the market. Businesses will not be required to demonstrate that their transaction will not substantially lessen competition.
• The ACCC will maintain a public register of all merger reviews, including merger details and reasons for determinations.

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This article includes general information only and is not specific to your situation. If you require assistance in relation to anything contained within this article, please contact us.

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