House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Jim Chalmers MP)

Chapter 4: Substantial lessening of competition

Detailed explanation of Commission consideration of acquisitions

4.1 The amendments provide that if the Commission is notified of a proposed acquisition, the Commission may, in writing, determine that the acquisition:

•

may be put into effect; or

•

must not be put into effect.

4.2 The determination may include conditions and/or a declaration regarding goodwill protection contractual provisions. A reference in the CCA to a determination will include a reference to any condition or declaration included in it.

[Schedule 1, item 35, subsections 51ABZE(1), 51ABZF(1) and (4) and 51ABZG(1) and (4) of the CCA]

4.3 For the Commission to determine that the acquisition must not be put into effect:

•

the notification must be subject to a Phase 2 review;

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the Commission must have given a notice of competition concerns to the notifying party; and

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the Commission must be satisfied that putting the acquisition into effect would, in all the circumstances, have the effect, or be likely to have the effect, of substantially lessening competition.

4.4 The Phase 2 review is a process intended for in-depth economic and legal analysis of acquisitions that the Commission is satisfied could be anti-competitive following an initial Phase 1 review.

4.5 There must be a causal link between the acquisition and the effect, or likely effect, on competition for the Commission to make a determination that the acquisition must not be put into effect.

[Schedule 1, item 35, subsection 51ABZE(2) of the CCA]

4.6 The process for deciding that the notification is to be subject to Phase 2 review is discussed below.

4.7 It is intended that the Commission will apply its expertise and exercise its discretion having regard to all the relevant information before it.

4.8 In making a determination, the Commission must consider the object of the CCA (which is to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection) and all relevant matters, including the interests of consumers.

4.9 The interests of consumers may include price and non-price parameters, such as quality of goods or services, and choice of goods or services. For example, an acquisition could lead to the consolidation of data and technology, potentially impacting costs for consumers and reducing choice.

[Schedule 1, item 35, subsection 51ABZE(3) of the CCA]

4.10 Recognising the complex legal and economic assessment that the Commission must undertake, it is expected that the Commission would consider the relevant matters discussed below in making its determination. It is anticipated that the Commission will draw on economic and data analysis to determine the welfare effect on consumers. This means the observable characteristics of proposed acquisitions that are predictive about whether they are likely to substantively lessen competition and thus harm consumers. The welfare effects on consumers includes the potential impacts in the long term, which can include how fast technology and other market dynamics are changing.

4.11 The Commission must give written notice of its determination (together with a written statement of reasons (including any relevant theory of economic harm), to the notifying party.

[Schedule 1, item 35, subsection 51ABZE(4) of the CCA]

4.12 For the purposes of the Act (other than Division 4 and Subdivision B of Division 6 of Part IVA and paragraph 51ABZZM(2)(a)), the Commission's determination is taken to be made when the Commission includes a copy of it on the acquisitions register.

4.13 This amendment ensures that the date of the Commission's determination is clear for all parties, particularly where it may have implications for the timing of certain review rights (such as judicial review).

[Schedule 1, item 35, subsection 51ABZE(5) of the CCA]

Conditions

4.14 When considering whether to include conditions in a determination the Commission must have regard to all relevant matters. Matters which may be relevant are described below. In addition, the Commission may have regard to the effect that the conditions could have on the interests of consumers and any consumer benefits that would result, or be likely to result, from compliance with the conditions.

4.15 The Commission must not include conditions unless it is satisfied that the acquisition could substantially lessen competition in any market, if there were no conditions. In this context, 'could' denotes a possibility. This amendment is intended to be a safeguard against conditions which are unnecessary where there are no competition concerns. However, it is not intended to prevent the Commission from accepting a remedy proposal in Phase 1.

[Schedule 1, item 35, section 51ABZF of the CCA]

4.16 The Commission may impose conditions which accept a remedy proposal that is offered by a party to the acquisition (in the form of commitments or an undertaking). Ordinarily a remedy proposal condition or undertaking will be offered by the notifying party after taking into account feedback from consultation with interested market participants.

4.17 If a remedy is offered by a party to the acquisition (subject to specified timeframes), the Commission may extend the determination period to allow time for consultation with interested market participants on the remedy proposal offered by the notifying party.

4.18 Commitments or undertakings that are offered by a party to the acquisition to remedy competition concerns do not need to be in a form capable of immediate acceptance by the Commission. However, there must be sufficient detail to enable the Commission to consider and consult with market participants about the remedy proposal offered by the notifying party.

4.19 Where there are multiple possible remedies offered by the parties, the Commission is entitled to include conditions that it considers most appropriate and likely to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection, consistent with the object of the Act, having regard to all relevant matters.

Substantial lessening of competition

4.20 The Commission will have regard to a number of matters when considering whether an acquisition, if put into effect, would, in all the circumstances, have the effect, or be likely to have the effect, of substantially lessening competition. Section 4G of the CCA considers the meaning of the term 'lessening of competition'.

4.21 The 'substantial lessening of competition' test requires consideration of the closeness of competition between the parties to the acquisition, to understand what may be lost, in terms of competition, as a result of the acquisition. This is a well understood concept which currently applies to the assessment of acquisitions in Australia (see section 50 of the CCA), as well as other provisions of the CCA such as the prohibition against the misuse of market power (see section 46 of the CCA).

4.22 The Commission must have regard to all relevant matters. In addition, and without limiting its capacity to have regard to any relevant matter, the Commission may have regard to:

•

the existing or proposed commercial relationships of the parties to the acquisition, including agreements between them (and, if any of the parties is a body corporate, the relationship of other related bodies corporate); and

•

the contract, arrangement or understanding, or proposed contract, arrangement or understanding, pursuant to which the acquisition is to take place.

[Schedule 1, item 35, subsections 51ABZH(1), (2) and (3) of the CCA]

4.23 For the purposes of this Part, the acquisition may have the effect or be likely to have the effect of substantially lessening competition in a market if the acquisition would, in all the circumstances, have the effect, or be likely to have the effect, of creating, strengthening or entrenching a substantial degree of power in the market.

4.24 Matters relevant to working out whether a corporation has a substantial degree of power in a market have effect for the purposes of this Part with some modifications.

[Schedule 1, item 35, subsections 51ABZH(4) and (5) of the CCA]

4.25 The amendments emphasise the importance of considering the competitive structure of the market in the overall assessment of the effects of the acquisition on competition, by making it clear that a substantial lessening of competition can include creating, strengthening or entrenching a substantial degree of market power. This concept is explained further below.

4.26 The assessment of whether an acquisition would have the effect, or be likely to have the effect, of substantially lessening competition in a market is a complex economic and legal assessment of the likely forward-looking effects of an acquisition requiring a single evaluative judgement. This requires explicit emphasis on economic methodology and analysis of competitive effects.

Relevant matters

4.27 In undertaking its analysis of whether acquisitions would have or be likely to have the effect of substantially lessening competition, it is important for the Commission to focus on potential economic harms, including adapting to new economic challenges over time.

4.28 Economic factors to which the Commission could be expected to have regard in assessing the risks to competition include:

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the market position of the parties to the acquisition and their economic and financial power;

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whether the acquisition would result in the removal of a vigorous and effective competitor;

•

the nature of competition, including potential competition, in the market;

•

the effect of the acquisition on the conditions for competition in the market;

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the structural and/or other conditions affecting competition, including the level of concentration in the market;

•

the conditions or barriers to entry and expansion to the market and the impact of the acquisition on those barriers;

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the nature and strength of competitive constraints, whether within and/or outside the market, including the potential for the acquisition to give rise to increases in prices and/or profit margins;

•

the degree of product and/or service differentiation in the market;

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the degree of dynamism, whether through innovation or otherwise, in the market;

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the degree of countervailing power in the market;

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the extent to which the acquisition may give rise to efficiencies that could not otherwise be obtained and the extent to which those efficiencies may ultimately benefit consumers.

4.29 These points are not a checklist of factors to consider but are intended to guide the Commission's assessment of the competitive impact of acquisitions, based on economic and legal analysis of evidence, information and data.

4.30 In doing so, these factors will help inform the Commission's substantive guidelines that set out its approach to the complex economic and legal assessment of whether an acquisition is likely to substantially lessen competition. Those guidelines will guide and inform businesses, stakeholders and the community. These factors may also be a reference point to guide the Tribunal in its review of Commission determinations, and the courts in the event of any applications for review of Commission and Tribunal decisions.

4.31 These factors are not intended to limit the Commission's discretion as to what constitutes a relevant matter. What is relevant and the weight to be attributed in the Commission's consideration will depend on the facts and circumstances, recognising that it involves predictions about the future.

4.32 While not determinative, the Commission may distinguish between acquisitions that may be anti-competitive and those that are likely to be benign or pro-competitive, by having regard to changes in market conditions (outlined in the above factors) that would be likely to result from an acquisition. This may mean considering the market position of the parties to the acquisition and their economic and financial power. This includes the commercial relationships between the parties to the acquisition and between each of the parties to the acquisition and third parties. This is because, for example, the nature of vertical relationships in supply chains or the extent to which there is vertical integration, may impact on competition. It may also mean considering how an acquisition may impact on the ability and incentives of competitors (both existing competitors and potential future entrants to a market), and whether it would reduce, retain or foster competitive tension. For example, heightened barriers to entry that deter or impede the prospect of new entrants into the relevant market may be a relevant consideration. Alternatively, the acquisition of a key facility that downstream businesses rely on may have intermediate or longer-term impacts on the ability and incentives of market participants to compete.

4.33 In considering the effect of the acquisition on conditions for competition, the Commission may take into account the closeness of competition between the parties to the acquisition, and the competitive environment that may result, post-acquisition. For example, an acquisition that leads to the removal of a close competitor with products or services with similar characteristics where the parties closely follow each other's pricing, range or service offerings may reduce competitive tension and be an indicator of a less competitive market.

4.34 Efficiencies are a relevant matter for the Commission to consider in its analysis of the likely effect of the acquisition on competition. One of the principal benefits of competition is that it promotes economic efficiency. Some mergers may generate efficiencies without substantially lessening competition. For example, vertical mergers that generate efficiencies and do not raise rivals' costs or foreclose competition are not likely to substantially lessen competition. However, an acquisition may generate efficiencies in the form of lower costs but still lead to an increase in market power This consideration is different from the public benefit test (discussed in Chapter 5), which requires the weighing of any competitive detriment with offsetting public benefit.

Commercial relationships of the parties

4.35 The Commission may have regard to the commercial relationships of the parties to the acquisition, including any related bodies corporate (if applicable). For example, other commercial agreements (such as access or service agreements) between the parties may affect their likely behaviour, ability and incentives in connection with the proposed acquisition. This assessment does not involve weighing the competitive effects likely to result from other agreements, together with the acquisition. However, the assessment should be undertaken in light of all relevant circumstances, which may include other commercial agreements or arrangements between the parties.

Contract, arrangement or understanding pursuant to which the acquisition is to take place

4.36 The Commission may have regard to any documentation or information relevant to the acquisition. The documentation includes the contract, arrangement or understanding, or proposed contract pursuant to which the acquisition is to take place.

4.37 The Commission may also consider any goodwill protection provisions contained in the documents and information that the Commission is to have regard to.

Creating, strengthening or entrenching a substantial degree of market power

4.38 The effect of these amendments is to make it clear that a substantial lessening of competition can be constituted by a creation, strengthening or entrenching of substantial market power.

4.39 The amendments do not limit the circumstances in which a substantial lessening of competition occurs (that is, a substantial lessening of competition does not have to involve the creation, strengthening or entrenching of substantial market power).

4.40 The Commission will as relevant undertake an assessment of whether an acquisition creates, strengthens or entrenches a substantial degree of market power and whether that has the effect, or likely effect of substantially lessening competition.

4.41 The specific mention of 'creating, strengthening or entrenching a substantial degree of power in a market' is intended to increase the focus on the market power of the parties to the acquisition and to clarify that even an incremental change in market power may still amount to a substantial lessening of competition, if the acquisition strengthens the acquirer's market power (that is, their ability to act with a degree of freedom from competitive constraints).

4.42 In addition, establishing a position of substantial market power in another market that the acquirer (or relevant business) previously did not operate in, may also constitute a substantial lessening of competition depending on the characteristics of the parties involved or nature of the market.

4.43 A substantial lessening of competition can arise through creation of the power to generate supra-competitive profits or exclude entry where that power did not previously exist. If a firm has that power already, the substantial lessening of competition can arise through a strengthening or entrenching of that power. This reflects the economic link between a lessening of competition and an increase in market power, and it should be seen as an elucidation of the ways in which a substantial lessening of competition can arise rather than a change to the meaning of a substantial lessening of competition.

4.44 This amendment applies to the 'substantial lessening of competition' test for acquisitions assessed by the Commission under these new provisions (and section 50 of the Act), and its inclusion in these provisions is intended to clarify that creating, strengthening or entrenching market power can amount to a substantial lessening of competition. It is not intended to alter or limit the scope of the general meaning of 'substantial lessening of competition' in the Act in this regard.

Cumulative effects of serial acquisitions

4.45 The Commission may treat the effect of an acquisition as being the combined effect of the acquisition and certain earlier acquisitions.

[Schedule 1, item 35 subsections 51ABZH(6) and (7) of the CCA]

4.46 This is intended to allow the Commission to be able to take into account the impact of serial acquisitions, which are a series of acquisitions by parties which individually may not substantially lessen competition, but may have the effect of substantially lessening competition when considered as a whole. Acquisitions in small, local markets can have a significant impact on competition in local areas, as well as national, regional and/or State-wide competition.

4.47 The amendments allow the Commission to consider the combined effects of the current acquisition and previous acquisitions that involve goods or services that are the same or substitutable for, or otherwise competitive with, each other, irrespective of geographic area in Australia. The Commission may consider the aggregated impact of such acquisitions, but is not required to do so.

4.48 The circumstances in which the Commission may consider the combined effect of an acquisition and earlier acquisitions are when:

•

the earlier acquisition is put into effect during the 3 years ending on the effective notification date of the notification of the current acquisition; and

•

the parties to the earlier acquisition include a party to the current acquisition (or if a party to the current acquisition is a body corporate, a related body corporate of that party); and

•

involve the supply or acquisition of the same goods or services, or that are substitutable for, or otherwise competitive with, each other, as the current acquisition.

[Schedule 1, item 35, subsection 51ABZH(6) of the CCA]

4.49 Three years is considered an appropriate reference period to capture strategic business behaviour and take account of dynamic conditions of competition in markets.

4.50 These considerations in relation to the combined effect of certain acquisitions do not limit the circumstances in which an acquisition would or could, if put in effect, have the effect, or be likely to have the effect, of substantially lessening competition.

[Schedule 1, item 35, subsection 51ABZH(7) of the CCA]

4.51 The provisions of Subdivision B (substantial lessening of competition) do not affect the meaning of substantially lessening competition outside the new system in Part IVA of the CCA.

[Schedule 1, item 35, subsection 51ABZH(8) of the CCA]

Goodwill protections

4.52 Where the contract pursuant to which an acquisition takes place is a contract for the sale of a business or of shares in the capital of a body corporate carrying on a business, the Commission may declare, in respect of a notification of the acquisition, that paragraph 51(2)(e) of the Act does not apply to a goodwill provision of the contract. However, the Commission may only do this if it is satisfied that the provision is not necessary for the protection of the purchaser under the contract in respect of the goodwill of the business.

[Schedule 1, items 6 and 35, subsection 4(1) definition of "goodwill protection provision", subsections 51ABZG(1) to (3) of the CCA]

4.53 Provisions in business sale contracts that are solely to protect the goodwill of a business for the purchaser are exempt from the prohibitions against anti-competitive conduct in Part IV of the CCA (under paragraph 51(2)(e)). The Commission will be able to declare that this goodwill exemption does not apply, for example, where the contract includes a non-compete clause, if the duration and/or geographic scope is broader than necessary for the protection of the purchaser in respect of the goodwill of the business. The broader the scope or longer the duration is, the less likely any obligations or restrictions on the activities on the parties will be regarded as necessary and solely to protect the goodwill of the business.

4.54 If the Commission does not make a declaration in respect of a goodwill provision this does not preclude the Commission from commencing action in relation to a potential breach of the prohibitions against anti-competitive conduct in Part IV of the CCA in relation to the relevant provision in the contract for sale at a later stage.

[Schedule 1, item 35, subsection 51ABZG(4) of the CCA]

Process for considering acquisitions

4.55 Schedule 1 to the Bill provides for the process for considering acquisitions under the new Part IVA of the CCA.

Time for making determinations

4.56 As acquisitions are time-sensitive, prompt decision-making is critical. Clear review timelines are an important procedural safeguard and will assist parties in planning their transactions and interested stakeholders in engaging with the Commission's review. To ensure prompt reviews by the Commission, the amendments include timeframes that the Commission and parties must comply with.

4.57 These timelines assume that the Commission has all the information and evidence it needs to consider an application. Therefore, timing can be extended in certain circumstances, for example, if the Commission requests additional information.

4.58 The earliest time that the Commission may make a determination is 15 business days after the effective notification date of the notification. After that 15 business day period in Phase 1, the Commission may make a determination at any point in Phase 1 or at any point in Phase 2, subject to certain time limits.

[Schedule 1, item 35, subsection 51ABZI(1) of the CCA]

4.59 The 15 business day period ensures that stakeholders have adequate time to engage with the Commission and make submissions in relation to the notification. It also allows the option of a prompt 'fast track' determination if no concerns are identified by the Commission.

4.60 Business days are defined as not including a Saturday or Sunday, or a day that is a public holiday in the Australian Capital Territory, or any day between 23 December and 10 January. Subsection 36(1) of the Acts Interpretation Act 1901 makes it clear that, if a period of time is expressed to occur between 2 days, the period of time includes those days. This means that the reference to 'any day between 23 December and 10 January' means 23 December and 10 January are to be treated as non-business days in Part IVA of the CCA.

4.61 If the Commission does not make a determination within the determination period, it is deemed to have made a determination that the acquisition may be put into effect. The determination period is the Phase 1 determination period for the notification, or the Phase 2 determination period for the notification (if the notification is subject to Phase 2 review). However, a determination that is deemed to have been made does not include any condition or declaration included in it.

4.62 The purpose of the statutory timeframes is to provide certainty to businesses. It is in the notifying party's interests to provide information promptly to facilitate an efficient review by the Commission. The statutory timeframes set out the maximum time period in which the Commission must make its determination, subject to any extensions. The Commission may therefore make a determination in a shorter period of time, provided any relevant statutory requirements are met (such as the lapse of the 15 business day period in subsection 51ABZI(1) or requirement for the Commission to provide a notice of competition concerns for acquisitions subject to Phase 2 review, pursuant to section 51ABZK).

[Schedule 1, item 35, subsections 51ABZI(2) and (3) of the CCA]

•

The Phase 1 determination period is 30 business days starting on the effective notification date, subject to any extensions under subparagraph 51ABZB(2)(a)(ii) and section 51ABZZE of the CCA.

[Schedule 1, item 35, subsection 51ABZI(4) of the CCA]

•

The Phase 2 determination period is 90 business days starting immediately after the end of the Phase 1 determination period, subject to any extensions under paragraph 51ABZB(2)(b) and subsections 51ABZK(5), 51ABZL(4) and 51ABZN(2) and section 51ABZZE of the CCA.

[Schedule 1, item 35, subsection 51ABZI(5) of the CCA]

4.63 If the Commission purports to make a determination in respect of a notification of an acquisition, and the determination is invalid or the Federal Court sets the determination aside or requires the Commission to remake the determination, this does not result in the Commission having been taken to have made a determination at the end of the determination period. Thus, these circumstances do not automatically lead to a determination that the acquisition may be put into effect.

[Schedule 1, item 35, subsections 51ABZI(6) and (7) of the CCA]

4.64 If the Commission decides that a notification of an acquisition is to be subject to Phase 2 review, it must do so in writing during the Phase 1 determination period.

4.65 The Commission may decide that the notification is to be subject to Phase 2 review if the Commission is satisfied that the acquisition could, in all the circumstances, have the effect, or be likely to have the effect, of substantially lessening competition in any market. In this context, 'could' denotes a possibility. This is intended to recognise that by the end of Phase 1, the Commission may have identified possible competition concerns which require further investigation.

4.66 The Phase 2 review allows the Commission to undertake in-depth legal and economic analysis of acquisitions identified as potentially anti-competitive following the Phase 1 review.

[Schedule 1, item 35, subsection 51ABZJ(1) of the CCA]

4.67 The Commission must give the notifying party written notice that it has decided that the notification should be subject to Phase 2 review. The written notice must detail the day by which the fee (if any) for the Phase 2 review must be paid. The fee and the timing for payment of the fee are both determined by the Minister by legislative instrument.

[Schedule 1, item 35, subsection 51ABZJ(2) and (4) of the CCA]

4.68 The notice will explain why the Commission is satisfied that the acquisition, to which the notification relates, if put into effect, could in all the circumstances, have the effect, or be likely to have the effect, of substantially lessening competition in any market, by reference to the nature of the theories of harm being considered and the matters the Commission intends to investigate before making a determination. It is intended to be a brief explanation including a description of the parties to the acquisition and the economic activities in which they engage.

[Schedule 1, item 35, subsection 51ABZJ(3) of the CCA]

4.69 When deciding that a notification should be subject to Phase 2 review, it is not intended that the Commission be required to provide reasons that adhere to the requirements of section 25D of the Acts Interpretation Act 1901. The Commission is therefore not required to set out the findings on material questions of fact and refer to the evidence or other material on which those findings were based, though it may choose to do so.

4.70 The Commission must not make an acquisition determination if the Phase 2 fee has not been paid. Further, the Commission is taken to have ceased considering the notification if the fee has not been paid by the time on which the time for payment is due.

[Schedule 1, item 35, paragraphs 51ABZJ(2)(c) and (d) of the CCA]

4.71 Schedule 1 to the Bill amends the ADJR Act by adding that decisions under subsection 51ABZJ of the CCA are excluded from ADJR Act review.

4.72 The decision to subject a notification to Phase 2 review is a procedural step in the review process. It is important that the Commission is able to provide a timely decision about whether an acquisition should be put into effect which would not be possible if review were available and sought on the decision to subject the notification to Phase 2 review.

4.73 Safeguards are provided for in the Bill to ensure the process is subject to review and that the notifying parties have an opportunity to be heard on matters which may affect the Commission's acquisition determination.

[Schedule 1, item 80, Schedule 1 to the ADJR Act]

Notice of competition concerns

4.74 Within 25 business days after the start of the Phase 2 determination period, or as soon as practicable thereafter, the Commission may provide written notice (a 'notice of competition concerns') which sets out the Commission's preliminary assessment of whether the acquisition, if put into effect, would have the effect, or be likely to have the effect, of substantially lessening competition in any market.

4.75 The notice should also set out the grounds on which the Commission has made that preliminary assessment, referring to the evidence or other material on which those grounds are based.

4.76 Combined with the effect of subsection 51ABZE(3), the Commission must issue a notice of competition concerns within the 25 business day time period if the Commission wishes to determine that an acquisition cannot be put into effect.

4.77 This will not apply if the Commission makes a determination in respect of the notification of the acquisition on or before the 25th business day after the start of the Phase 2 determination period.

[Schedule 1, item 35, subsections 51ABZK(1) to (4) of the CCA]

4.78 Where the notice of competition concerns is not given before the end of the 25th business day:

•

with the notifying party's written agreement-the Phase 2 determination period (and the period in which remedies may be offered in paragraph 51ABZZE(3)(b)) is extended by the number of business days (as applicable) during which the notifying party's written agreement is in force:

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business days that occur after the 25th business day from the start of Phase 2;

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business days on or before which the Commission does not give the notice of competition concerns;

•

in any other case-the 15 days mentioned in subsections 51ABZZD(3) and (5) (Information gathering) are reduced by the number of those applicable days, unless the reduction would be of more than 15 business days (in which case, the limitations on the information that may be requested and/or taken into account pursuant to those subsections do not apply in relation to making the determination).

[Schedule 1, item 35, subsections 51ABZK(5) to (7) of the CCA]

4.79 The notifying party is to be given a reasonable opportunity to make oral or written submissions to the Commission in relation to the grounds set out in the notice to ensure procedural fairness. The notifying party may also request additional time to make such submissions to the Commission, if required.

4.80 The notice of competition concerns is an important step in the process and ensures the notifying party is informed of the Commission's preliminary assessment of whether the notified acquisition would be likely to have the effect of substantially lessening competition in any market. It is intended to complement and provide further particulars of any issues identified by the Commission during the Phase 1 process as well as any other relevant matters.

4.81 This process is intended to ensure that the Commission sets out and explains its competition concerns to the notifying party. The explanation must include the grounds on which the Commission has made its preliminary assessment, referring to the evidence or other material on which those grounds are based which formed the basis of the Commission's satisfaction. The Commission is not required to provide access to its case file or confidential third party information.

4.82 The notifying party will have the opportunity to respond to the notice of competition concerns, ahead of the Commission's determination, to ensure procedural fairness. The notifying party may also request additional time (more than once) to make such submissions to the Commission, if required.

4.83 Upon receiving the notice of competition concerns, the notifying party may make submissions to the Commission during the period starting on the day the Commission gives the notice of competition concerns and ending on the 25th business day after that day.

4.84 Unless an extension is granted, the Commission must not take into account submissions from the notifying parties about the notice of competition concerns received after this period expires. This ensures the Commission has sufficient time to assess, consider and take into account the submissions ahead of making its determination. If the Commission extends the period for responding to the notice of competition concerns, the Phase 2 determination period is also extended by the same number of days.

4.85 The notifying party is not precluded from providing material to the Commission after this point. However, the information must relate to information or developments not otherwise addressed in the notice of competition concerns, or relate to information requested by the Commission, to be taken into account by the Commission (or the Tribunal upon review). Under section 51ABZZD, the Commission may consult and receive or obtain submissions or information until 15 business days before the end of Phase 2 or the public benefit determination period.

[Schedule 1, items 8 and 35, subsection 4(1) definition of "notice of competition concerns", subsections 51ABZL(1) to (4) of the CCA]

4.86 Sections 51ABZK and 51ABZL do not prevent the Commission from making a determination that the acquisition may be put into effect at any time before the end of the determination period. Parties to an acquisition should be able to engage with the Commission on the status of their notification on a regular and reasonable basis therefore the Commission may engage with the notifying parties earlier than 25 business days into Phase 2 and may provide the notice of competition concerns before then.

[Schedule 1, item 35, section 51ABZM of the CCA]

False or misleading information

4.87 The Commission may extend the Phase 2 determination period if satisfied that the notification is materially misleading, contains information that is false in a material particular or information given by the notifying party to the Commission in relation to the notification is false in a material particular.

4.88 The Commission may extend the period starting on the day the Commission makes a decision under subsection 51ABZN(2) and including each day on which the notifying party has not given the Commission the information or documents and including the day the notifying party does give the information or documents.

4.89 The Commission must make its decision within a reasonable period and must give written notice of the decision to the notifying party. If the Phase 2 determination period is extended other timeframes (under section 51ABZK and paragraph 51ABZZE(3)(b)) are similarly extended.

[Schedule 1, item 35, section 51ABZN of the CCA]

4.90 If the Commission has decided to extend the Phase 2 determination period due to false or misleading information, and the notifying party gives information or documents to the Commission in response, the information or documents must be accompanied by the fee determined by the Minister via legislative instrument. Any information given must be in writing. Unless the fee is paid the information or documents are taken not to be given.

[Schedule 1, item 35, section 51ABZO of the CCA]

Conditions

4.91 The Commission must not have regard to a commitment or undertaking offered by a party to the acquisition to remedy competition concerns, unless it is offered within the specified time periods.

4.92 The Commission has discretion to consider any commitments (including in the form of undertakings) offered by the parties to the acquisition in making a determination subject to certain timeframes.

4.93 The Commission must not have regard to a commitment or undertaking offered by a party to the acquisition if the commitment or undertaking is offered later than 20 business days after the notification is made (that is, the effective notification date) in Phase 1.

4.94 However, if the notification is subject to Phase 2 review, the Commission may have regard to a commitment or undertaking if it is offered no later than the 60th business day occurring on or after the start of the Phase 2 determination period, or if an extension has been made in accordance with subsection 51ABZZE(3) then the date for when a commitment or undertaking may be offered is extended accordingly.

[Schedule 1, item 35, section 51ABZZC of the CCA]