Same same but different: ACCC releases new merger assessment guidelines for public consultation

Yesterday on 20 March 2025, the ACCC released its draft merger assessment guidelines for public consultation. The guidelines outline the ACCC’s approach to analysing the potential effects of mergers on competition under the new mandatory merger clearance regime, which will formally commence on 1 January 2026. The draft guidelines will replace the existing merger guidelines (released in 2008) and merger authorisation guidelines (released in 2018).

This follows the ACCC’s publication of transitional guidelines on 4 March 2025, which we discuss here. Additional guidelines on the process for seeking clearance under the new regime are expected to be released later this month.

Interested parties can provide written feedback on the draft guidelines until 17 April 2025.

Key takeaways

The draft guidelines do not depart materially from the ACCC’s established analytical framework and approach to assessing whether a merger will have the effect or likely effect of substantially lessening competition, and instead expand and elaborate on several elements of the existing framework to reflect changes to the legislation (which you can read more about here)
The draft guidelines incorporate legal and economic principles from recent merger decisions such as the Federal Court’s decision in ACCC v Pacific National Pty Ltd (2020) 277 FCR 49 and the Australian Competition Tribunal’s decision in Applications by Australia and New Zealand Banking Group Limited and Suncorp Group Limited [2024] ACompT 1 (ANZ Suncorp)
The draft guidelines reflect a focus on specific theories of harm (including issues raised by recent complex mergers the ACCC has had to grapple with) with an apparent de-emphasis on market definition and counterfactual analysis (both of which have been moved to appendices)
There is an increasing focus on market power of merger parties and serial acquisitions, consistent with changes to legislation
The draft guidelines signal an increasingly data-driven approach to merger assessments
The ACCC’s approach to the public benefits assessment will remain largely consistent with its existing approach under merger authorisation assessment
The draft guidelines reflect a continued focus on mergers involving digital platforms

Further information about some of our key takeaways are below:

Increasing focus on market power of merger parties and serial acquisitions, consistent with changes to legislation

Consistent with the ACCC’s previous commentary and legislative changes under the new regime, the draft guidelines acknowledge that an acquisition which ‘creates, strengthens or entrenches’ market power may be indicative of a substantial lessening of competition. The ACCC reiterates in the draft guidelines that the addition of ‘creates, strengthens and entrenches’ is ‘intended to increase the focus on the market power of the merger parties and to clarify that even a small change in market power may amount to a substantial lessening of competition’.

This increased focus on market power (and, in particular, on acquisitions which result in small, incremental changes in market power), is also reflected in the ACCC’s guidance on ‘serial acquisitions’ and how the ACCC might employ the ‘3 year look back’ mechanism under the new regime to assess the cumulative effects of mergers. The ACCC notes that, while each individual acquisition may not substantially lessen competition, the combined effects of a series of smaller transactions may raise competition concerns, as they may – when viewed collectively - create, strengthen or entrench a firm’s market power. In considering whether a serial acquisition has this effect, the draft guidelines provide that the ACCC may consider information or evidence regarding the merger parties’ acquisition pattern and overall strategic approach to serial acquisitions, including business plans, acquisition incentives and evidence of the likely impact of both individual acquisitions and series of acquisitions on the merged firm’s market position.

Guidelines signal an increasingly data-driven approach to merger assessments

Consistent with the ACCC’s public commentary, the draft guidelines signal that the ACCC will be applying a more rigorous economic and data driven approach to assessing the competitive effects of mergers. This, in turn, may inform the information and data that may be required as part of any application to the ACCC (on which we are waiting further details in ministerial instruments).

For example, the guidelines make clear that:

market shares may be measured by the ACCC on a variety of metrics e.g. revenue, unit sales, measures based on capacities or reserves and non-price indicators, such as number of users or frequency of use,
to assess the closeness of competition between the merger parties, the ACCC may consider various data including customer switching data to understand diversion ratios, analysis of bidding patterns and production capacity of the merger parties,
robust evidence will likely be required to conclude that entry or expansion is sufficient to offset a loss of competition,
monetary estimates relied on for any public benefits arguments will likely need to be accompanied by details about the underlying data, methodology used, assumptions and reasoning upon which the estimates rely and the bases for the assumptions and reasoning, and
claims as to improved efficiency arising from the merger will likely need to be substantiated with evidence e.g. accounting statements, internal studies, strategic plans, integration plans, management consulting studies, consumer surveys or research, and other available data.

Public benefits assessment largely consistent with existing approach under merger authorisation assessment

Under the new regime, if the ACCC determines that the merger may not be put into effect because it is likely to substantially lessen competition, or determines that it may be put into effect with conditions, a merger party may apply for a determination that the merger should be allowed to proceed on the basis of a net public benefit.

The draft guidelines outline the ACCC’s approach to assessing public benefits and detriments as part of this ‘public benefits assessment’. The draft guidelines largely reflect the ACCC’s existing approach set out in the 2018 merger authorisation guidelines, although contain slightly less detail than these existing guidelines, and have also been updated to reflect principles from the Australian Competition Tribunal’s recent decision in ANZ Suncorp (e.g. that the nature of public benefits should be defined with some precision (although need not be quantified if that would be no more enlightening than qualitative statements), that estimates involved in a benefit analysis should be robust and commercially realistic, and that appropriate weighting will be given to future benefits not achievable in any other less anti-competitive way (so the options for achieving the claimed benefits should be explored and presented)) .

Continued focus on mergers involving digital platforms

The draft guidelines also reflect the ACCC’s continued focus on competition issues in the digital economy, and provide guidance on how the ACCC might view and analyse competitive effects for transactions involving digital platforms.

Since the release of the ACCC’s existing merger guidelines in 2008, there has been increasing regulatory scrutiny (both globally and locally) of the activities of digital platforms – including through the ACCC’s Digital Platforms Services Inquiry. The ACCC and its international counterparts have recognised that mergers involving digital platforms have unique features that necessitate a different approach to assessing their competitive effects. Reflecting this, the draft guidelines outline the ACCC’s approach to evaluating mergers of multi-sided platforms, including its consideration of direct and indirect network effects and non-price indicators as part of any assessment of competitive harm.

The draft guidelines also set out the ACCC’s approach to considering acquisitions of nascent competitors which may eliminate potential competition (so-called ‘killer acquisitions’), which global regulators have expressed concerns about in the digital industry over the last decade. For example, in assessing whether a merger involving a potential entrant would lead to a loss of future competition, the ACCC may consider whether either merger party would have entered or expanded absent the merger, having regard to their internal documents, business forecasts or valuation models, the attractiveness of the potential competitor’s product to customers, or whether the potential entrant has existing products which could facilitate entry or expansion (e.g. through cross-selling or bundling). The ACCC will also have regard to the potential loss of dynamic competition (i.e. the loss or muting of incentives to invest or innovate in the face of potential new entry), taking into account the likelihood of entry by the new entrant, the expected closeness of competition between the acquirer and the target, and the ability of the acquirer to respond to the threat of entry by the target.

Expansion of existing analytical framework to include recent legal and economic developments

As mentioned above, the draft guidelines incorporate legal and economic developments and insights from recent complex merger cases that the ACCC has reviewed. In particular, the draft guidelines provide further colour on the following issues, many of which the ACCC has had to grapple with in recent merger decisions:

the ACCC’s analytical approach to assessing mergers involving competing buyers, including how the ACCC will evaluate whether a merged firm can exercise ‘monopsony power’, which will involve an assessment of whether the merged firm can lower prices below competitive levels whilst also resulting in a decrease in the total quantity of products available in the market (or a reduction in some other aspect of competition),
the ACCC’s evaluation of competitive effects from mergers involving firms that are active across multiple distinct markets which involve products or geographic areas that are not substitutable for one another. The ACCC’s guidance makes clear that the ACCC may consider different markets together in its analysis where merger parties set their competitive offering similarly across these markets, or where competitive conditions are similar,
the ACCC’s approach to assessing competitive effects of partial or minority acquisitions, which will focus on 4 principal effects being 1) the ability to influence the competitive conduct of the target firm, 2) any reduction on the investor’s incentive to compete, 3) access to competitively sensitive information, and 4) preventing another buyer from purchasing an interest in the target,
how the ACCC will assess the likelihood of input or customer foreclosure arising from vertical mergers, including the specific qualitative and quantitative factors that underpin an assessment of whether a vertically integrated firm will have the ability or incentive to foreclose its competitors,
how the ACCC will assess the potential for coordinated effects from a transaction, incorporating principles from the Australian Competition Tribunal’s ANZ Suncorp decision, in particular market vulnerability to coordination, incentives for firms to deviate from coordination, the risk of retaliation from deviation, and historical evidence of coordination, and
a detailed framework for how the ACCC will assess rivalry-enhancing efficiencies, including whether the efficiencies are attributable to the merger and verifiable.