CHOICE & the Consumers' Federation of Australia have made a joint submission contributing to the Federal Government's Competition Taskforce's consultation about merger reform.
Australia has many markets that are highly concentrated; supermarkets, airlines, banking, telecommunications, energy and insurance are all markets where a few dominant companies provide most Australians with essential products and services. We are also seeing the emergence of new highly concentrated markets in the digital economy, such as social media and online search services.
Consumers pay the price of highly concentrated markets, including through higher prices, poor customer service and lower product and service quality. There is also evidence that businesses in concentrated markets infringe consumer protections more often.
Effective merger control should help stop companies in already concentrated markets growing bigger and more powerful in ways that harm consumers. It should also prevent the emergence of new highly concentrated markets with poor consumer outcomes.
Our submission makes a number of recommendations. We encourage the Competition Taskforce to recommend the Government implement reforms to:
- introduce a merger control process consistent with the ACCC's proposals, including requiring businesses to satisfy the ACCC that the merger is not likely to substantially lessen competition;
- ensure consumer advocates are notified of potential mergers that may harm consumers and are invited to provide evidence;
- enable consumer advocates to access funding required to participate throughout the merger control processes, noting that engaging with Australian Competition Tribunal or Court-based processes can be particularly resource intensive; and
- ensure the merger control test(s) enables consideration of evidence about the effect of the merger decision on consumers experiencing disadvantage or vulnerability.
Download submission (PDF)
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