The ACCC has teamed up with the UK’s Competition and Markets Authority and Germany’s Bundeskartellamt to issue a landmark joint statement highlighting the importance of rigorous merger control enforcement and pointing to acquisitive Big Tech as hampering competition and harming consumers.

The joint statement labels "the rise of acquisitive tech giants with activities across multiple current or future markets" as a threat to competition taking into account the "increased importance of [their] products and services and the aggregation of data over time." It also asserts that market power can be "easily created or entrenched" in dynamic and highly concentrated markets such as technology where a "seemingly small transaction of a start-up or mid-tier business by a dominant player can cause a competitive market to tip in an anticompetitive direction."

All three regulators favour using structural remedies to protect competition in such instances "by opposing a transaction outright or via divestiture remedies" rather than by relaying on behavioural remedies after the fact, which they observe have had limited past success in restoring effective competition after market power has been gained from a merger. 

And while the joint statement acknowledges that the "forward-looking nature" of merger control review will "always mean competition agencies face some uncertainty" when making decisions, and uncertainty is a particular challenge in the case of concentrated, dynamic and fast-paced markets such as technology, "uncertainty as to the future should not necessarily mean that potentially anticompetitive mergers are cleared." In other words, if in doubt, the competition regulators will be more likely going forward to block a merger or require a divestiture as a pre-condition to a merger, rather than granting clearance for the merger to go ahead and relying on behavioural remedies down the track (particularly if the merger involves Big Tech).

In an accompanying statement, Andreas Mundt, President of the German Bundeskartellamt, specifically singled out Big Tech when describing the limitations of behavioural remedies, stating that "abuse proceedings are difficult, lengthy, involve many economic and legal issues when it comes to Big Tech", requiring the Bundeskartellamt to "rigorously apply merger control" to avoid a "very difficult... post-merger road". 

UK Competition and Markets Authority CEO, Andrea Coscelli, referred more generally to "digital" markets, reiterating an intention to "thoroughly examine mergers on behalf of business and consumers – especially in dynamic markets like digital – and take strong action where needed."

Paragraph 15 of the joint statement heralds an opportunity for competition agencies to "reassess their approach so that a degree of uncertainty about future developments in the relevant markets does not lead, by default, to a clearance decision." This comes after the ACCC signaled in its 2021 Compliance and Enforcement Priorities that it will be advocating for changes to Australia's merger control regime to make it easier to "rebalance" the regime "to prevent anti-competitive mergers in order to preserve or promote competition."

Or in other words, if in doubt, block?