Section 94 Federal Competition and Consumer Protection Act 2018

Section 94 of the Federal Competition and Consumer Protection Act 2018 is about Consideration by the Commission of effect of a merger on competition. It is under Part XII (Price Mergers) of the Act.

(1) When considering a merger or a proposed merger, the Commission shall-
(a) determine whether or not the merger is likely to substantially prevent or lessen competition, by assessing the factors set out in subsection (2);

(b) if it appears that the merger is likely to substantially prevent or lessen competition, then determine –
(i) whether or not the merger is likely to result in any technological efficiency or other procompetitive gain which will be greater than, and off-set, or is likely to result from the merger, and would not likely be obtained if the merger is prevented, and
(ii) whether the merger can or cannot be justified on substantial public interest grounds by assisting the factors set out in subsection (3);

(c) otherwise, determine whether the merger can or cannot be justified on substantial public interest
grounds by assessing the factors set out in subsection (3).

(2) When determining whether or not a merger or a proposed merger is likely to substantially prevent or lessen competition, the Commission shall assess the strength of competition in the relevant market and the probability that the undertakings in the market, after the merger, will behave competitively or cooperatively, taking into account any factor that is relevant to the competition in that market, including-

(a) the actual and potential level of import competition in the market;
(b) the ease of entry into the market, including tariff and regulatory barriers;
(c) the level and trends of concentration, and history of collusion in the market;
(d) the degree of countervailing power in the market;

(e) the dynamic characteristics of the market, including growth, innovation, and product differentiation;
(f) the nature and extent of vertical integration in the market;
(g) whether the business or part of the business of a party to the merger or proposed merger has failed or is likely to fail; and
(h) whether the merger or proposed merger will result in the removal of an effective competitor.

(3) Where it appears that a merger or proposed merger is likely to substantially prevent or lessen competition, the Commission shall determine –
(a) whether or not the merger or proposed merger is likely to result in any technological efficiency or other procompetitive advantage which will be greater than, and offset, the effects of any prevention or lessening of
competition, while allowing consumers a fair share of the resulting benefit; and

(b) whether the merger or proposed merger can or cannot be justified on substantial public interest grounds by assessing the factors set out in subsection (4).

(4) When determining vvhether a merger or proposed merger can or cannot be justified on grounds of public interest, the Commission shall consider the effect that the merger or proposed merger will have on –
(a) a particular industrial sector or region;
(b) employment;
(c) the ability of national industries to compete in international markets; and
(d) the ability of small and medium scale enterprises to become competitive.