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Government takes first step towards creeping acquisition law to promote competition.



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NO.072

GOVERNMENT TAKES FIRST STEP TOWARDS

CREEPING ACQUISITIONS LAW TO PROMOTE COMPETITION

The Assistant Treasurer and Minister for Competition Policy and Consumer Affairs, Chris Bowen MP, today released a discussion paper calling for public comment on the best way forward for a creeping acquisitions law.

The release of the discussion paper fulfils a commitment as part of the Government's preliminary response to the release of the ACCC's Grocery Inquiry.

Creeping acquisitions refer to the cumulative effect of a number of small, individual transactions, which when considered in isolation, might not be captured by the existing mergers and acquisitions test under section of the Trade Practices Act.

"The Government recognises concerns that the mergers and acquisitions provisions of the Trade Practices Act do not enable the ACCC to effectively deal with incremental acquisitions," Mr Bowen said.

"Consideration of the need for legislative reform in relation to creeping acquisitions is an election commitment, and the release of this discussion paper is an important step in ensuring that all the issues can be examined."

Concerns about creeping acquisitions usually arise when a supplier with a substantial degree of market power look to acquire smaller competitors.

In its Grocery Report the ACCC describes creeping acquisitions as a 'series of acquisitions of smaller competitors over time which individually do not raise competition concerns, but which when taken together may have a significant competitive impact. Creeping acquisition might also refer to a player with existing market power making a small acquisition, even though the small acquisition does not substantially lessen competition in itself'. (xxi, Overview)

Copies of the discussion paper can be obtained from the Treasury website: www.treasury.gov.au.

The closing date for submissions is Friday 10 October 2008. Submissions may be lodged electronically, by post or facsimile.

Unless otherwise indicated by respondents, submissions will appear on the Treasury website.

Media Release of 01/09/2008

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