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ARTICLE · 12 FEBRUARY 2007

Offering A Merger Undertaking Or Not Complying With One? Expect A Tougher ACCC Stance

Minter Ellison
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In recent months, the ACCC has taken a tougher stance on merger undertakings. In seeking informal clearance from the ACCC that a proposed acquisition will not have the effect, or likely effect, of substantially lessening competition in contravention of section 50 of Trade Practices Act 1974 (Cth) (TPA), companies can offer, or be requested to give, certain undertakings to the ACCC in accordance with section 87B of the TPA.

AustraliaAntitrust/Competition Law
Geoff Carter
Geoff Carter

In recent months, the ACCC has taken a tougher stance on merger undertakings. In seeking informal clearance from the ACCC that a proposed acquisition will not have the effect, or likely effect, of substantially lessening competition in contravention of section 50 of Trade Practices Act 1974 (Cth) (TPA), companies can offer, or be requested to give, certain undertakings to the ACCC in accordance with section 87B of the TPA. In the merger context, companies often agree to divest a business or part of a business to ease ACCC concerns and enable the merger to proceed.

Enforcement of undertakings

In the past, the ACCC has generally been reluctant to take on the role of monitoring compliance with undertakings, or enforcing undertakings in the case of non-compliance. This position seems to have changed. In early October, Graeme Samuel (ACCC Chairman) reportedly stated that due to 'one or two mavericks who seek to subvert the intent' of an undertaking, the ACCC has been forced to take a

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