House of Representatives

Explanatory Memorandum

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

Chapter 8: Consequential, commencement and transitional amendments

Consequential amendments

Creation of chapters for the CCA

8.1 To improve the CCA's readability, Part 2 to Schedule 1 to the Bill makes a number of minor, consequential amendments to the CCA, including to insert chapter and division headings that group the existing and new Parts of the CCA:

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Chapter 1-Preliminary

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Encompasses Parts I to IIIAB of the CCA

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Chapter 2-Access to services

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Encompasses Part IIIA of the CCA

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Chapter 3-Restrictive trade practices

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Encompasses Parts IV and IVA of the CCA

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Chapter 4-Provisions relating to particular industries, payment surcharges etc.

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Encompasses Parts IVB to V of the CCA

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Chapter 5-Enforcement and remedies

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Encompasses Part VI of the CCA

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Chapter 6-Other provisions

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Encompasses Parts VII to XIA of the CCA

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Chapter 7-Further provisions relating to particular industries etc.

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Encompasses Parts XIB and XIC of the CCA

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Chapter 8-Miscellaneous

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Encompasses Parts XID to XIII of the CCA

[Schedule 1, items 2, 21, 22, 23, 24, 35, 36, 37, 38, 40, 41, 45, 60 to 65]

Ministerial directions

8.2 The Minister may give the Commission directions connected with the performance of its functions or the exercise of its powers under the CCA subject to express limitations including Part IV of the CCA. Schedule 1 to the Bill extends the limitations such that the Minister must not give directions relating to the new system.

[Schedule 1, item 19, paragraph 29(1A)(a) of the CCA]

Consequential amendments to undertakings provisions

8.3 Sections 10.49, 10.60 and 10.65 of the CCA require parties to a registered conference agreement and ocean carriers to abide by an undertaking given under the relevant provisions. A contravention of such an undertaking is deemed to be a contravention of a Part IV provision.

8.4 The amendments exclude the new system (Division 1A of Part IV) from this deeming provision. As a result, a contravention of an undertaking given under the relevant provisions is not considered a contravention of the new system.

[Schedule 1, item 57, subsections 10.49A(2), 10.60(2) and 10.65(2) of the CCA]

Consequential amendments to section 51

8.5 Section 51 of the CCA provides exceptions to Part IV of the CCA. A number of consequential amendments to section 51 are made to:

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disapply certain exceptions in deciding whether a person has contravened new Division 1A of Part IV, including anything authorised by regulations under the CCA and anything does in a State or Territory which is specifically authorised by a State or Territory Act or regulations;

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disregard any provision of a contract for the sale of a business or of shares in the capital of a body corporate carrying on a business if the contract is solely for the protection of the purchaser in respect of the goodwill of the business and it is not declared under subsection 51ABZG(1).

[Schedule 1, items 33 and 34, paragraphs 51(1C)(b) and 51(2)(e) of the CCA]

Consequential amendments related to the Competition Code

8.6 The Competition Code includes the Schedule version of Part IV and certain other provisions in the CCA. Provisions in the CCA that are part of the Competition Code are required to be read in a way that fits with the Schedule version of Part IV.

8.7 The amendments to subsection 150C(2) exclude paragraphs 51ABB(1)(d) to (f) and subparagraph 51ABC(2)(a)(iii) from the Competition Code.

[Schedule 1, item 58, subsection 150C(2) of the CCA]

8.8 Paragraphs 51ABB(1)(d) to (f) refer to the acquisition of shares in the capital of a corporation, any assets of a corporation, or anything relating to a corporation as determined. These paragraphs are linked to the corporations power in section 51(xx) of the Commonwealth Constitution and are not needed in the Competition Code version of the acquisitions provisions applied by the States and Territories under the Conduct Code Agreement 1995. Paragraphs 51ABB(1)(a) to (c) cover acquisitions of shares in the capital of a body corporate, acquisitions of assets of a person, and acquisitions by a corporation of anything determined.

8.9 The amendments add determinations made by the Commission to the list in section 150J of the CCA. This ensures that the validity of determinations made by the Commission is not affected solely because they were made for the purposes of the Competition Code.

[Schedule 1, item 59, section 150J of the CCA]

8.10 Section 151AI of the CCA provides that in determining the meaning of a provision of Part IV or VII, Part XIB (relating to anti-competitive conduct in the Telecommunications industry) is to be ignored. The amendments add Part IVA to this provision and heading, such that Part XIB is to be ignored when considering provisions in Part IVA.

[Schedule 1, items 61 and 62, section 151AI of the CCA]

8.11 Similarly, the amendments add Part IVA to section 152AK and its heading. The effect of this is that Part IVA joins Parts IV and VII in not being affected by the operation of Part XIC (the Telecommunications access regime).

[Schedule 1, items 63 and 64, section 152AK of the CCA]

Schedule version of Part IV

8.12 Parallel amendments are made to the Scheduled version of Part IV (as set out in Schedule 1 to the CCA) which States and Territories apply via their own legislation, to mirror the amendments to Part IV.

[Schedule 1, items 72 to 79, sections 45AMA, 45AT(3) and (4), 45AV, 45AW, 45AX, 45AY, 45AZ, 45AZA, 45AZB, 45(7), (8B)-(8C), 50(5B), 51(1C)(b) and 51(2)(e) of Schedule 1 of the CCA]

Consequential amendments to other legislation

8.13 Consequential amendments are made to other Acts to update references and support the new system.

Airports Act 1996

8.14 The amendments align the Airports Act with the new system and clarify that acquisitions involving the Sydney (Kingsford Smith) and Sydney West Airport lessee companies becoming subsidiaries of the same company do not, when considered in isolation, substantially lessen competition for the purposes of section 50 of the CCA and the acquisitions provisions. These acquisitions are also exempt from the notification requirements under Division 2 of Part IVA of the CCA.

[Schedule 1, items 81 and 82, section 241, subsections 248(2)-(2B) of the Airports Act 1996]

Corporations Act 2001

8.15 The amendments to the Corporations Act relate to the transfer of shares or business of a licensed clearing and settlement (CS) facility under Division 4 to Part 7.3B of Chapter 7 of that Act ('Division 4').

Consultation

8.16 The Reserve Bank must consult with the Commission before making a determination on such transfers unless the Commission has notified the Reserve Bank in writing that it does not wish to be consulted about the specific transfer or the class of transfers to which the transfer belongs.

[Schedule 1, item 83, section 837G of the Corporations Act 2001]

8.17 Amendments are made to preserve the application of the CCA to these transfers subject to the exception to the notification requirements under the new system for such transfers.

[Schedule 1, items 84 and 85, paragraph 839J(3)(b) and subsection 839J(4) of the Corporations Act 2001]

8.18 For the purposes of section 50 and related provisions of the CCA, as well as the new acquisitions provisions, a transfer of shares or business under Division 4:

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to the extent the transfer is of shares in the capital of a body corporate - is taken to be an acquisition of the shares by the receiving body, and

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to the extent the transfer is of other assets - is taken to be an acquisition of those assets by the receiving body.

[Schedule 1, item 85, subsection 839J(5) of the Corporations Act 2001]

8.19 However, such an acquisition resulting from a transfer under Division 4 is not required to be notified under the new acquisitions provisions. In addition, for the purposes of subsection 51(1) of the CCA, a transfer of shares or business under Division 4 (and anything done to enable or facilitate such a transfer) are specified and specifically authorised for the purposes of subsection 51(1) of the CCA, which provides that in deciding whether a person has contravened Part IV, anything specified in, and specifically authorised by an Act must be disregarded.

[Schedule 1, item 85, subsection 839J(6) of the Corporations Act 2001]

Financial Sector (Transfer and Restructure) Act 1999

8.20 The FSTR Act is amended to provide that for the purposes of the acquisitions provisions a transfer of business (whether voluntary or compulsory), a transfer of shares, or a transfer pursuant to an internal transfer certificate under the FSTR Act are taken to be acquisitions of shares or assets as applicable. This is consistent with how such transfers are regarded for the purposes of section 50 of the CCA under subsection 43(9) of the FSTR Act. For the purposes of the acquisitions provisions the 'transferring body' within the meaning of the FSTR Act is a 'party' to the acquisition; it is also noted that the 'receiving body' within the meaning of the FSTR Act is the 'principal party' to the acquisition.

8.21 An acquisition that is a compulsory transfer under Part 4 of the FSTR Act is not required to be notified under the new system. This buttresses the existing position under subsection 43(9A) of the FSTR Act that a transfer of business or transfer of shares under Part 4 and anything done to enable or facilitate such a transfer are specified and specifically authorised for the purposes of subsection 51(1) of the CCA.

8.22 Subject to the special arrangements for certain voluntary transfers under the FSTR Act in section 51ABZZQ, acquisitions that are voluntary transfers under Part 3 of the FSTR Act will be subject to the new system if they are required to be notified, for example because the notification thresholds are met.

[Schedule 1, item 86, subsection 43(9AA) of the Financial Sector (Transfer and Restructure) Act 1999]

Radiocommunications Act 1992

8.23 The amendments extend provisions that deem certain radiocommunications licence allocations and authorisations as acquisitions of assets and conduct (for the purposes of section 50 and other relevant provisions of the CCA) to the new acquisitions provisions.

8.24 Specifically, the authorisation to operate radiocommunications devices under a spectrum licence, the issue of a spectrum licence, the issue of an apparatus licence and the authorisation to operate radiocommunications devices under an apparatus licence are now treated as acquisitions of assets and conduct under section 50 and other relevant provisions of the CCA and the acquisitions provisions.

[Schedule 1, items 87, 88, 89, 90, 92 and 94, paragraph 51(2)(d), subsection 68A(2), subsection 71A(2), subsection 106A(2) and subsection 114A(2) of the Radiocommunications Act 1992]

8.25 However, acquisitions that are the issue of a spectrum licence and the issue an apparatus licence) are not required to be notified under Division 2 of Part IVA of the CCA.

[Schedule 1, items 91 and 93, subsection 71A(4) and subsection 106A(5) of the Radiocommunications Act 1992]

8.26 Further, changes are made to the reflect the interaction between the Commission's review of acquisitions under the new system and ACMA's obligations to update the Register of Radiocommunications Licences and transfer apparatus licences. ACMA need not update the Register for spectrum licence assignments or variations related to assignments if the acquisition is a notified acquisition under the CCA and the notification has not been finally considered and the Commission has not decided to cease considering it (see meaning above).

[Schedule 1, item 95, subsection 146(3) of the Radiocommunications Act 1992]

8.27 Similarly, for transfers of apparatus licences (under section 131AB of the Act), the timeline for ACMA's decision on licence transfers excludes any day when the transfer is a notified acquisition, the day occurs on or after the effective notification date of the latest notification of the acquisition, and the notification has not been finally considered and the Commission has not decided to cease considering it.

[Schedule 1, item 96, subsection 286(9) of the Radiocommunications Act 1992]

Commencement, application and transitional amendments

Amendments made by Schedule 1

8.28 The amendments made by Schedule 1 to the Bill commence in three stages:

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Part 1 of Schedule 1 to the Bill commences the day after the Bill receives Royal Assent. This part includes amendments to allow merger authorisation applications to be made only until 30 June 2025.

[Schedule 1, item 1, subsection 88(1A) of the CCA]

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Part 2 of Schedule 1 to the Bill commences on 1 July 2025. This part introduces the new Part IVA, including provisions for voluntary notification of acquisitions and the substantive changes establishing the mandatory notification requirements.

[Schedule 1, Part 2]

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Part 3 of Schedule 1 to the Bill commences on 1 January 2026. This part amends section 50 of the CCA to clarify the meaning of substantially lessening competition in the context of acquisitions.

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To ensure consistency with and support the broader amendments, the merger factors in subsection 50(3) will be repealed and the 'substantial lessening of competition' test in section 50 will also be amended to align with the substantially lessening competition test, so that for the purposes of section 50, 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. This will promote consistency in competition assessments for both acquisitions considered in the new system and under section 50. This amendment does not affect the meaning of substantially lessening competition outside of section 50.

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Subsections 46(3) to (8), which contain matters relevant to working out whether a corporation has a substantial degree of power in a market have effect as if those subsections included a reference to section 50.

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Section 191 has the effect that the amendments do not apply to acquisitions put into effect before 1 January 2026. As such, the amendments do not affect the operation of the CCA in relation to pre-1 January 2026 acquisitions.

[Schedule 1, Part 3, items 97 to 99, subsections 50(3), (3A) and (3B) of the CCA]

Amendments made by Schedule 2

8.29 The amendments made by Schedule 2 to the Bill commence as follows:

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Part 1 of Schedule 2 to the Bill commences on 1 January 2026. This part introduces a civil penalty for providing false or misleading information in response to section 155 notices. The penalty applies to contraventions occurring on or after that date, regardless of when the notice was given.

[Schedule 2, Part 1, items 1 to 4, subparagraph 76(1)(a)(iiic), subsections 76(1A) and 155(5) of the CCA]

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Parts 2 to 5 to Schedule 2 to the Bill commence the day after the Bill receives Royal Assent. These parts make miscellaneous amendments to the CCA, as detailed below:

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Part 2 clarifies the duties imposed by the Competition Code. It inserts new provisions to address the application of duties to Commonwealth entities under both Commonwealth law and State or Territory law.

[Schedule 2, Part 2, items 5 and 6, sections 150FA(5A) and 150FAA of the CCA]

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Part 3 amends provisions relating to the Divisions of the Commission and allows for more flexible composition of Divisions. To support efficient administration of the new system, the amendments allow Divisions of the Commission to make decisions without requiring the Chair of the Commission to be part of the Division.

[Schedule 2, Part 3, items 7 to 9, section 19 of the CCA]

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Part 4 updates the Commission's delegation powers. It repeals existing delegation provisions in section 155 and introduces a new section 155AAAA, which provides for more comprehensive delegation arrangements for the Commission's information-gathering powers.

[Schedule 2, Part 4, items 10 to 12, sections 155 and 155AAAA of the CCA]

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Part 5 makes a technical amendment to correct a cross-reference in subsection 6(2A) of the CCA.

[Schedule 2, Part 5, item 13, subsection 6(2A) of the CCA]

Transition to the new system (1 July 2025 to 31 December 2025)

Voluntary notification

8.30 To facilitate a smooth transition to the new system, parties can voluntarily notify proposed acquisitions to the Commission under the new Part IVA from 1 July 2025.

[Schedule 1, item 71, section 188 of the CCA]

Continuation of merger authorisation

8.1 The merger authorisation process under Part VII of the CCA is retained until 31 December 2025.

8.2 However, applications for merger authorisation can only be made until 30 June 2025.

8.3 From 1 January 2026 onwards, the Commission must not grant a merger authorisation.

[Schedule 1, Part 1, item 1 and Part 2, items 46 and 47, subsections 88(1), (1A) and (2), and 90(16) of the CCA]

Acquisitions authorised before 1 January 2026

8.4 The mandatory notification requirements do not apply to an acquisition if, between 1 July 2025 and 31 December 2025, the Commission either:

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grants a merger authorisation for the acquisition under section 88, or

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advises a party to the acquisition, in writing, that the Commission does not intend to take action under the CCA in relation to section 50 in relation to the acquisition, and

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the acquisition is put into effect during the 12 months starting on the day the Commission grants the authorisation or gives the advice.

[Schedule 1, item 71, subsection 189(2) of the CCA]

8.5 This transitional arrangement provides certainty for parties who have sought and obtained clearance or authorisation before the commencement of the new system. The 12-month period allows sufficient time for parties to complete their transactions while ensuring a timely transition to the new system.

8.6 The amendments clarify that the transitional provision relating to the Commission's written advice does not:

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confer any additional powers or functions on the Commission, including the power to provide such advice or make decisions about providing it, or

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limit the Commission's ability to take action in relation to a contravention, or possible contravention, of section 50 of the CCA, or

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affect the operation of any law other than Division 2 of Part IVA (Acquisitions that are required to be notified).

[Schedule 1, item 71, subsection 189(3) of the CCA]

Start of the new acquisitions system (from 1 January 2026)

Mandatory notification

8.7 Division 2 of Part IVA, which contains the mandatory notification requirements, applies to acquisitions put into effect on or after 1 January 2026, subject to certain exceptions discussed above.

[Schedule 1, item 71, subsection 189(1) of the CCA]

8.8 Notification waiver applications under the new system may be made on or after 1 January 2026.

[Schedule 1, item 71, subsection 189(4) of the CCA]

Amendments to existing merger provisions

8.9 Section 50, as amended, continues to apply to acquisitions put into effect on or after 1 January 2026 that are not subject to the new system. The existing merger prohibition in section 50 of the CCA continues to operate alongside the new Part IVA but does not apply to notified acquisitions under Part IVA.

[Schedule 1, Part 3, item 30, subsection 50(5B) of the CCA]

8.10 This maintains legal continuity and a familiar framework for acquisitions, as well as allowing the Commission to take enforcement action against anti-competitive acquisitions that are not notifiable under Part IVA. This supports transition to the new system, and its status can be considered as part of the review of the operation of Part IVA.

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

8.11 Section 50A, which relates to acquisitions that occur outside Australia, is amended to provide that the prohibition does not apply to notified acquisitions or acquisitions that are put into effect on or after 1 January 2026.

[Schedule 1, items 31 and 32, section 50A and subsection 50A(7A) of the CCA]