Competition regulators in Australia, the UK and Germany have introduced new attacks on monopolies – especially in the technology sector – that could hurt consumers.
As part of the push, the Australian competition regulator will call for a change in the law to make it easier to block mergers.
How Can A Merger Limit Competition?
In a joint statement on Tuesday, the top three executives said that even taking over a “seemingly small” junior tech company by one of the biggest players could create competition scarcity in the market.
The chairman of the Australian Consumer Competition Commission, Rod Sims, and his colleagues – UK Competition and Markets Authority chief executive Andrea Coscelli, and Bundeskartellamt president Andreas Mundt – said it was better to address the unethical behavior by sending these takeovers back rather than taking remedial action once it has happened.
“We know that once market power is gained from a merger, it is very difficult to restore competition with our other competition enforcement tools, making it crucial for us to use merger control more effectively,” Sims said.
Lobbying With Government
This statement is likely to put Sims in opposition to Australian courts that have overturned the ACCC’s decision to knock back mergers or impose conditions on them.
But Sims said in the middle of the year he would start lobbying the provincial government to change Australia’s competition law to make it easier for the ACCC to win in court.
“We have not won a merger case before the courts in over 20 years,” he said.
“Our view is that we have to change the system.The focus of competition agencies, courts and tribunals must be on the importance of protecting competition and preventing anticompetitive mergers, otherwise there is a risk that merger control instead skews towards merger clearance and so damages our economy.”
The competition bosses said tackling monopolistic mergers would be more important than usual as the world emerged from a recession triggered by the Covid pandemic.
Digital Economy
“It’s important that we continue to fully explore integration on behalf of business and consumers – especially in dynamic markets like digital – and take drastic measures where necessary,” Coscelli said.
Mundt said there was already a “significant tightening oncentration” of markets in the digital economy.
“Stringent merger control is therefore indispensable,” he said.
“Abuse proceedings are difficult, lengthy, involve many economic and legal issues when it comes to big tech, and are merely aimed at a company’s specific conduct. If we do not rigorously apply merger control and prohibit anti-competitive mergers, the post-merger road that we subsequently have to take is a very difficult one.”
