Market concerns mount over merger law overhaul – Capital Brief

Competition lawyers and investors have called for more clarity on sweeping changes to Australian merger laws which are poised to add layers of additional scrutiny to private equity deals and venture capital investments into startups.

Just one week out from a consultation deadline on the planned changes, market participants say they are still in the dark on key aspects of the proposals, which they fear could indirectly stifle VC investment into startups and also make private equity “rollup” deals much harder to execute.

The changes are designed to force more companies to notify the Australian Competition and Consumer Commission (ACCC) of their deal plans and stop “creeping acquisitions”, two issues the regulator has grown enormously frustrated with in recent years due to the rise and rise of Big Tech and a voluntary system that it feels allows too many mergers to escape review.

Rampersand VC partner Paul Naphtali told Capital Brief that as drafted, the existing proposals are a “fishnet that catches dolphins (and) hasn’t had enough thought.”

“We know there’s reform required. We know that the oligopolistic or monopolistic environment in Australia is not great for competition or for consumers, and that’s at the big end of town”, Naphtali said.