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How will proposed legislative changes change merger processes under the act?
In 2001 the Howard Government commissioned an inquiry into the Trade Practices Act 1974 (Cth). A committee was formed consisting of an ex justice of the high court, an accountant and an ex corporate lawyer. In April 2003 they released their findings and recommendations. An inquiry does not have the effect of immediately changing legislation; the report must first be reviewed by parliament and translated into a bill, and for the recommendations to become law the bill must be passed by the senate. The Trade Practices Legislation Amendment Bill 2005 encapsulates the Dawson committee’s recommendations. The bill is due to be reviewed by the senate in August 2005 .
The reforms will have an effect on any firm applying to the ACCC for merger clearance. In most cases firms that apply for clearance are successful and never have to use the authorization process. For example in the financial year 2001 – 2002 the commission considered 237 asset sales, mergers and joint ventures. Of all these cases the commission only rejected 9, of this 9 a further 5 were granted clearance pursuant to s87B undertakings. On average the Commission only opposes around 2% of merger cases .
A major recommendation of the Dawsom Committee was that:
“Applications for the authorization of mergers should be made directly to the tribunal. This process should have the following features:
• Applications should be considered within the statutory time limit of three months;
2.3.2 there should be no review on the merits of the tribunals decisions; and
2.3.3 the tribunal should have the power to remit an applicati ...