Merger Law Reform: "Creeping Acquisitions"

Section 50 of the Trade Practices Act 1974 (TPA) prohibits mergers or acquisitions that are likely to result in a "substantial lessening of competition" in a market, a test that the Government believes needs amending to better address problems associated with so-called "creeping acquisitions". On 1 September 2008, the Minister for Competition and Consumer Affairs released a discussion paper (discussion paper), foreshadowing options for legislative changes to the merger provisions of the TPA.

"Creeping acquisitions" are described in the discussion paper as the "accumulated effect of a number of small individual transactions which, when considered in isolation at the time that each transaction occurred, would not breach section 50 ... [but] over a longer period a series of such transactions may have the cumulative effect of substantially lessening competition in a market".