The ACCC has released revised Draft Merger Review Process Guidelines (Draft Guidelines) which contain a number of proposed revisions to the Current Guidelines. The changes will not result in any substantive changes to the existing practices of the ACCC and do not tackle the difficult issues of access to the ACCC’s file (which is not possible, other than during the discovery process in litigation), or the challenges of the formal merger clearance process (which has not yet been used).
The review of the existing guidelines is a welcome development insofar as it may result in the ACCC’s published policy on merger control being updated to reflect the ACCC’s current practices.
The changes can be summarised as follows:
Pre-assessment of mergers
The “pre-assessment” of mergers is expressly included in the Draft Guidelines. This is a streamlined process through which the ACCC can form a view, based on the information provided, that a merger will not substantially lessen competition without the need for market inquiries. This really reflects the current practice of the ACCC. As stated by the ACCC Chairman Rod Sims, 250 of the 340 reviewed mergers in 2011/2012 were assessed in this manner.
The Draft Guidelines provide that a decision to pre-assess a merger will not be taken lightly and will depend on, amongst other factors, how familiar the ACCC is with the relevant industry.
Feedback and market concerns
Merger parties will be provided with feedback following: (i) initial market inquiries, and (ii) consultation pursuant to a Statement of Issues (SOI) being published. The Draft Guidelines indicate that the purpose of providing this feedback is to facilitate a “no surprise” approach, and will enable the merger parties to respond to issues raised during market inquiries. The ACCC has been providing this feedback to merger parties for some time in the form of a “transparency letter”.
Mergers with an international dimension
Where mergers are simultaneously being reviewed in other jurisdictions, the ACCC makes it clear that it may suspend its review of a merger pending discussions with foreign regulators or, in some circumstances, pending the outcome of a review by a foreign regulator. This may create local delays for parties to an international merger.
Timelines and “Provisional” Decision Dates
Review timelines have been substantially lengthened in the Draft Guidelines. A public review phase which will typically last between six to twelve weeks before a decision is made or an SOI is published (compared to two to eight weeks in the Current Guidelines). If an SOI is published, a secondary timeline will be published which extends announcement of a final decision for a further six to twelve weeks.
There is also increased emphasis on the “provisional” nature of the indicative decision date established at the commencement of a merger review. Again, the revised changes arguably reflect the ACCC’s actual practice.
Release of Public Competition Assessments (reasons for decision)
The Draft Guidelines provide that a Public Competition Assessment (PCA) will be published “as soon as practicable” after a decision is announced (replacing the word “possible” in the Current Guidelines). This may reflect the fact that the timeframe of two weeks originally envisaged for the release of PCAs is not being adhered to by the ACCC. Given the ACCC has taken some time to release PCAs, it remains to be seen what (if any) effect this change will have in practice.
The use of section 155 Notices in Merger Clearances
The Current Guidelines provide that statutory powers will generally not be used to compel merger parties to provide information (in the absence of a reason such as a refusal by a merger party to comply with a voluntary request). The Draft Guidelines state that the ACCC will use its statutory powers where it may be the most effective and/or efficient way of gathering the necessary information. It is arguable that the new wording changes the emphasis, and may indicate an increased willingness of the ACCC to use its statutory powers to compel the production of documents.
The ACCC is currently conducting public consultation on the Draft Guidelines and is seeking submissions and views from interested parties until 19 July 2013.
By William Osborn and Simon Cooke