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The Australian Competition Tribunal has upheld the Australian Competition and Consumer Commission’s (ACCC) decision to reject the proposed regional spectrum authorisation agreement between Telstra Corporation Limited and TPG Telecom Limited. The ACCC had previously denied the authorisation on December 21, 2022.
The Tribunal’s decision was based on concerns that the deal would give Telstra a significant advantage and increase its market power in the retail and wholesale mobile markets, which could weaken competition and lead to higher prices and margins over time.
The Tribunal’s decision provides clarification on its approach to assessing the likely effects of proposed arrangements on competition and public benefits.
“This is the first review by the Tribunal of a merger authorisation under a new authorisation regime which came into effect in 2017,” ACCC Commissioner Liza Carver said.
“The Tribunal has clarified its approach to the assessment in an authorisation context of the likely effects on competition and any benefits which are likely to result from the proposed arrangements. The Tribunal’s reasoning will assist the ACCC in considering future applications for authorisation.”
Telstra and TPG applied for the review under section 101 of the Competition and Consumer Act on December 23, 2022.
The Tribunal applies the same “authorisation test” as the ACCC and is limited to the information before the ACCC. The authorisation provides statutory protection from court action for actions that might breach the competition provisions of the Competition and Consumer Act.
The Tribunal must not grant authorisation unless it is satisfied, in all the circumstances, that either the conduct would not have the effect or be likely to have the effect of substantially lessening competition or that the conduct would result or be likely to result in a benefit to the public, and the benefit would outweigh the detriment to the public that would result or be likely to result.
