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Recent changes to the content and enforcement of Australian Competition Law have been criticised as being “anti-business”; however, this article seeks to explain the broader rationale and context for the changes, which bring Australia more in line with similar OECD countries and seek to stimulate competition and productivity, writes Andrew Rankin and Tom Griffith.
The recent introduction of the mandatory merger clearance regime in Australia represents a wholesale change in the way mergers are regulated in Australia and a landmark moment in Australian Competition Law.
At the same time, the hearings of the prominent cases of the Australian Competition and Consumer Commission (ACCC) against each of Coles and Woolworths over their price discounting claims are reflective of a period of sustained enforcement activity by the regulator in the food and grocery sector that shows no signs of abating.
The ACCC’s cases against Coles and Woolworths relate to products sold by each of them at regular long-term prices that remained the same, excluding short-term specials, for at least six months and in many cases, at least a year. The products were then subject to price rises of at least 15 per cent for brief periods before being placed in Coles ‘Down Down’ and Woolworths’ ‘Prices Dropped’ promotions. The ACCC alleges that the display of the ‘Down Down’ and ‘Prices Dropped’ tickets was, in all the circumstances, misleading.
Regardless of the outcome of the cases, there remains the prospect of legislative change to seek to address perceived shortcomings in existing laws that currently appear to permit questionable claims of discount pricing to be made after temporary price spikes from long-term pricing levels.
Again, Australian laws in the area of pricing may be brought into line with other jurisdictions. In EU countries, for example, traders are obliged, when offering a discount, to indicate the lowest price applied to the item at least 30 days before the price reduction.
The changes to the merger approval regime have caused consternation amongst the business and advisor communities. Lead times for transactions have extended far greater than before, and companies are now being required to carefully consider the competition impact of the proposed merger activity well in advance of any formal activity. For lawyers, this involves far more early advice and analysis on competition law issues than before.
Mandatory merger regime
From 1 January 2026, Australia moved from a largely voluntary merger clearance regime to a mandatory and suspensory regime, under which certain acquisitions must be notified to the ACCC and cannot proceed until ACCC approval is obtained (subject to limited exceptions).
While the substantive test remains whether the acquisition is likely to substantially lessen competition in the Australian market, the consequences of failing to notify or proceeding without ACCC approval are now far more significant.
Notification obligations are triggered by revenue-based thresholds, which vary depending on the turnover of the acquirer and the target. Importantly, the regime also introduces a cumulative ‘creeping acquisitions’ test, requiring parties to aggregate certain acquisitions over the preceding three years when assessing whether the thresholds are met.
The notification process will involve significantly more time and rigour, including the preparation of detailed notification materials and substantive pre-lodgement engagement with the ACCC. The regime contemplates a two-phase review process. Phase 1 is intended to deal with the majority of transactions that do not raise material competition concerns, with Phase 2 reserved for more complex or contentious matters. The costs of compliance under the new regime are also material, even at Phase 1, reinforcing the need for early competition analysis and transaction planning.
What may be underestimated is not the substantive competition test, but the practical consequences of delay, information asymmetry and regulatory engagement. Transaction timetables, deal conditionality and execution risk will now be materially shaped by competition considerations far earlier than under the former voluntary system.
Pricing practices in light of Coles and Woolworths cases
By taking action against Coles and Woolworths, the ACCC has shown that it is not afraid of taking on novel and difficult cases in the public interest.
The mere bringing of the cases, regardless of their outcome, sends a message to businesses about the level of scrutiny that the ACCC will apply to discount pricing claims, and its preparedness to intervene if it perceives that sharp practice is occurring.
Key takeaways
In light of the recent merger clearance changes, anyone planning significant merger or acquisition activity should now be factoring ACCC scrutiny and approval into transaction structuring and timelines from the outset, rather than treating competition clearance as a downstream or optional consideration.
Similarly, pricing practices need to be defensible, not just from a strict legal perspective but on a “pub test” approach.
The twin developments highlight the preparedness of the Australian government to pursue economic reform through both significant legislative change and bolder enforcement action.
References / Sources: See Treasury Laws Amendment (Mergers and Acquisitions Reform) Act 2024 (Cth); ACCC, “Mergers and acquisitions – New merger control regime” (from 1 January 2026).
Andrew Rankin and Tom Griffith are partners with Piper Alderman.
