Summary

The proposed amendment to the Competition Act aims to remove the "efficiencies defence," which currently allows the Competition Tribunal to approve mergers even if they may harm competition, as long as the efficiencies gained are considered beneficial. With this change, the Tribunal can potentially block mergers that threaten market competition, focusing more on consumer protection.

What it means for you

• Consumers: Supporters believe consumers will benefit from increased competition, leading to lower prices and better services. Conversely, some consumers could face fewer choices if beneficial mergers are blocked.
• Businesses: Companies looking to merge may face increased scrutiny and longer approval times, affecting their growth plans. Small companies might feel the impact more than larger ones, as they often rely on strategic mergers to remain competitive.

Expenses

• For Businesses: The regulatory changes could lead to increased costs associated with longer and more complex merger processes. Companies may incur legal fees and other expenses in navigating the more rigorous approval landscape.
• For Government: Enforcement of the new regulations may lead to additional government spending on resources and personnel needed to assess and monitor mergers more closely.

Proponents view

Supporters argue that eliminating the efficiencies defence encourages fair competition, ultimately protecting consumers from monopolistic practices. They believe that fostering a more competitive market can lead to lower prices and higher quality services. This amendment aims to create a more diverse market landscape, promoting innovation and better choices for consumers.

Opponents view

Critics warn that removing the efficiencies defence could hinder economic growth by increasing barriers to beneficial mergers. They argue that these mergers often lead to operational efficiencies, cost savings, and job creation. Opponents also express concern that unpredictable regulatory scrutiny could discourage investment and make companies hesitant to pursue strategic mergers, ultimately stifling innovation and competition in the marketplace.