Mergers of big companies that ultimately shrink competition and typically exploit consumers are set to be threatened by new laws that Treasurer Jim Chalmers will introduce to Parliament today. And this new era of regulating the potential exploiters of consumers and small businesses, who have to endure unfair pricing, will initially be targeted at big supermarkets.
The AFR’s Ronald Mizen says laws “…will allow the Treasurer to designate ‘high-risk’ parts of the economy where the Australian Competition and Consumer Commission will be able to review all mergers, regardless of whether they meet the key thresholds”.
Chalmers wants the ACCC to have much more say on what big companies decide to do that could have negative consequences on competition.
Mizen reports that the Treasurer’s speech to Parliament will say the following: “This power, combined with the thresholds, will allow the ACCC to review all the mergers that they have been typically concerned about”.
And he’ll name and undoubtedly shame the supermarkets.
Here are the main points of the Treasurer’s proposed laws:
- The laws will apply to businesses with a combined turnover of $200 million.
- Or, if either business has a turnover above $50 million.
- Or, have global transactions greater than $250 million.
- Or, if a business has a turnover above $500 million and is looking to buy another with turnover greater than $10 million.
- And creeping acquisitions will be checked. This is where lots of smaller companies, which are under the ACCC’s thresholds for one-off acquisitions, are bought by a big company.
- The ACCC will look at purchases of a smaller company, where the price offered means the bigger company will own more than 20% of the targeted business.
- The ACCC will get an extra $30 million to look at bad behaviour in the supermarket sector.
- On the plus side, the Treasurer wants the ACCC to make decisions within 30 days where practicable.
The Treasurer wants private market transactions that could have serious negative competition effects to be monitored.
Like most big business-changing laws, there’ll be a lot of ‘devil’ in the detail. Parliament might insist on changes to the bill but the positive political effect of this assault on price-exploiting big businesses will be good for the Labor government’s most important job right now — vote-catching! But given the potential win-win effect for consumers and small businesses often exploited by big businesses, these laws will more than likely be seen as a move in the right direction by most Aussies.
