The Competition Review announced by the Australian Government on 23 August 2023 is well underway. A Competition Taskforce has been established, with the scope of the Review broad – extending beyond the current competition framework to include enquiring into and making recommendations on appropriate reforms to improve the Australian economy and the welfare of Australians, through productivity enhancing competition policy.
Current priority areas for reform
The Review is focussed on the Government’s priorities for “modernising” the Australian economy and addressing slowing productivity growth and falling living standards.1
The five current priority areas released by the Competition Taskforce this week are:
- Merger reform – considering the proposals put forward by the Australian Competition and Consumer Commission (ACCC) around merger reform, as well as other competition law issues
- Coordinated national reform – considering options for coordinated reform with states and territories
- Labour market opportunities – assessing the impact of non-compete clauses and no-poach agreements and whether such agreements stifle labour mobility
- The changing economy – providing advice on competition issues raised by new technologies, the net zero transformation and growth in the care economy
- Aviation – working with the Department of Infrastructure, Transport, Regional Development Communications and the Arts to consider competition issues as part of the development of the Aviation White Paper
The sustained influence of international competition law and policy trends is clear, evidenced particularly by the consideration of a new mandatory and suspensory merger control regime for Australia and non compete clauses and no-poach clauses.2 The Taskforce is engaging with overseas organisations, including the U.S. Federal Trade Commission (FTC) and Organisation for Economic Co-operation and Development (OECD), on competition policy concerns relating to non-compete and no-poach clauses that have been a key focus in overseas jurisdictions.3
Merger reform consultation
As we have previously reported, Australia’s competition regulator, the ACCC earlier this year released its revised proposal to Government to overhaul merger control in Australia through the implementation of a new mandatory and suspensory merger control regime. The proposals are aimed at addressing the ACCC’s concerns that the current informal clearance regime is no longer fit for purpose, with the current voluntary merger control framework meaning that it is not always approached in an appropriate timeframe for its view, the test skewed towards clearance and ineffective at addressing creeping acquisitions.
Notwithstanding the strong views of the ACCC, the Competition Taskforce will carefully consider the ACCC’s proposal against relevant data and feedback in consultation. A detailed consultation paper will be issued shortly, and it is proposed that initial consultations will commence in the next fortnight, asking: (i) is there a need for merger reform; and if there is (ii) what should this look like?
The public consultation will seek views on a range of issues, including:
- What if any improvements should be made to merger assessment processes?
- What is the right test to be applied in assessing a merger?
- Can merger and foreign investment assessments be streamlined?
- When should mergers be notified? Should a voluntary or mandatory regime be adopted?
- Which merger control model (i.e. merger clearance process or enforcement) should be adopted?
- Should a ‘structural’ element (e.g. substantial market power) be included?
- Should the test focus on whether the merger is likely to substantially lessen competition or is not likely to substantially lessen competition?
Considerations for business
Businesses should consider the implications of the proposed changes on their strategic direction and day-to-day business operations. The Competition Taskforce is also seeking to understand where competition laws are working effectively in other jurisdictions and where they are not, to inform the potential approach in Australia. This is a key opportunity for global companies to seek to streamline their competition law obligations.
We will continue to track the foreshadowed public consultations, draw on our global network of knowledge and advise on any further developments. As a business affected by these changes, we suggest considering the extent to which you will submit your views into reforming competition law in Australia.
The Competition Taskforce remit
The Competition Taskforce that has been established consists of a panel of experts across law, finance and business.4 Speaking at the University of Melbourne on 16 November 2023, Chief Advisor to the Competition Taskforce, Marcus Bezzi outlined the scope and proposed approach of the Competition Taskforce, noting that it has adopted a dynamic and evidence-based approach to policy development. The Competition Taskforce will identify specific reform topics, conduct public consultations, gather evidence and present its findings to Cabinet on an ongoing basis over the next 2 years.
1 For further information on the review see: Competition Review | Treasury.gov.au.
2 For more information on the current issues surrounding the enforceability of employer-employee non compete provisions, visit the White & Case Global Non-Compete Resource Center (NCRC).
3 Noting that the Australian Government is already consulting, outside the Taskforce, on the introduction of an Unfair Trading Prohibition, with submissions open until 29 November 2023 – Unfair trading practices – Consultation Regulation Impact Statement | Treasury.gov.au.
4 For further information see: Competition Review | Treasury.gov.au.
5 This is in contrast to previous reviews into Australia’s competition laws, such as the 1993 Hilmer Review and the 2013 Harper Review, where no single report will be issued by the taskforce.