The Business Council of Australia (BCA) welcomes the opportunity to make a submission to the Competition Review Taskforce's consultation on merger notification thresholds.

The government's proposed merger reforms create a legal obligation for businesses to notify, or otherwise seek a notification waiver, for prospective acquisitions captured by notification thresholds. We understand that the proposed thresholds seek to balance the need to scrutinise mergers with potential anti-competitive effects, while not creating excessive compliance costs, but the BCA remains concerned the new merger control regime creates uncertainty for businesses and disincentives for investment in the Australian economy, particularly as Australia embarks on a substantial energy transition.

It is important that the new merger control regime does not deter potential mergers and acquisitions that may ultimately benefit consumers by passing on the benefits of more efficient ownership and capital structures, as well as potential economies of scale and scope. The BCA is particularly concerned that this deterrent effect may occur even before a transaction is notified and scrutinised by the Australian Competition and Consumer Commission (ACCC).

This highlights the importance of a well-designed notification regime that captures transactions most likely to be of concern from a competition perspective, but without overly burdening the majority of acquisitions that contribute to the more efficient ownership and control of equity capital.

The BCA has a number of major concerns about the proposed notification thresholds.

Read the full submission here.