Answer ... Under the informal merger review process, if the parties to a merger or acquisition transaction do not agree with the Australian Competition & Consumer Commission’s (ACCC) decision, then – unless the parties also require approval under the Foreign Acquisitions and Takeovers Act (FATA) – the parties may decide to proceed nonetheless with the transaction. In such case, if the ACCC wishes to continue to oppose the transaction, the ACCC will be required to commence proceedings under Section 50 of the Competition and Consumer Act (CCA) for a remedy – for example, an injunction to stop the transaction completing – on the basis that the transaction breaches Section 50.
If approval is required under FATA, this course is not necessarily open, as the parties will require FATA approval to proceed to completion of the transaction. The Australian Treasurer grants or withholds approval under FATA on the advice of the Foreign Investment Review Board (FIRB). The Australian Treasurer makes its decision based on the national interest, which includes a consideration of the competition impacts of the proposed merger or acquisition. FIRB will consult with the ACCC on competition issues. Therefore, if the ACCC rejects a transaction under the informal merger review process, it is unlikely that FATA approval will be obtained.
If a transaction is opposed by the ACCC under the informal merger review process (and irrespective of whether approval is required under FATA), the parties may seek a declaration that there is no contravention of Section 50 of the CCA in the Federal Court. This is not a review of the ACCC’s decision, but a full analysis of the transaction and the requirements of Section 50. In seeking such a declaration, the onus is on the parties to establish that the transaction will not have the effect or likely effect of substantially lessening competition.
Where a transaction is opposed by the ACCC under its informal process, the parties may also seek a merger authorisation which would allow the ACCC to approve a transaction that would otherwise breach Section 50 of the CCA if the public benefit outweighs the public detriment.
If the parties disagree with a merger authorisation, they may appeal to the Australian Competition Tribunal or to the Federal Court. An appeal to the Australian Competition Tribunal is a full merits review, and the tribunal will make its own findings and reach its own decision. An appeal to the Federal Court is a judicial review and is available only on a question of law.
Answer ... If the ACCC determines under the informal merger review process not to oppose a transaction (on either a conditional or unconditional basis), third parties can take action in the Federal Court under Section 50 of the CCA to oppose the proposed transaction. This is the case as the informal merger review process is not binding. Third parties may apply for divestiture orders or for damages for any loss suffered. Importantly, third parties may not seek an injunction to stop a transaction from proceeding.
If a third party disagrees with a merger authorisation decision of the ACCC, like the parties themselves, the third party may appeal to either the Australian Competition Tribunal or the Federal Court, on the same basis as the parties to the transaction. The tribunal must be satisfied that the third party has a sufficient interest before it will undertake a review. This test is not particularly onerous and requires the third party to establish that, for example, its business interests or prospects would be adversely impacted by the transaction. To apply for judicial review by the Federal Court, the third party must establish that it has standing, which may be more difficult.
Third parties may also seek to intervene in Federal Court proceedings or proceedings before the Australian Competition Tribunal in relation to Section 50 of the CCA.