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COMPETITION AND CONSUMER ACT 2010 - SECT 50

Prohibition of acquisitions that would result in a substantial lessening of competition

             (1)  A corporation must not directly or indirectly:

                     (a)  acquire shares in the capital of a body corporate; or

                     (b)  acquire any assets of a person;

if the acquisition would have the effect, or be likely to have the effect, of substantially lessening competition in any market.

Note:          The corporation will not be prevented from making the acquisition if the corporation is granted a clearance or an authorisation for the acquisition under Division 3 of Part VII: see subsections 95AC(2) and 95AT(2).

             (2)  A person must not directly or indirectly:

                     (a)  acquire shares in the capital of a corporation; or

                     (b)  acquire any assets of a corporation;

if the acquisition would have the effect, or be likely to have the effect, of substantially lessening competition in any market.

Note:          The person will not be prevented from making the acquisition if the person is granted a clearance or an authorisation for the acquisition under Division 3 of Part VII: see subsections 95AC(2) and 95AT(2).

             (3)  Without limiting the matters that may be taken into account for the purposes of subsections (1) and (2) in determining whether the acquisition would have the effect, or be likely to have the effect, of substantially lessening competition in a market, the following matters must be taken into account:

                     (a)  the actual and potential level of import competition in the market;

                     (b)  the height of barriers to entry to the market;

                     (c)  the level of concentration in the market;

                     (d)  the degree of countervailing power in the market;

                     (e)  the likelihood that the acquisition would result in the acquirer being able to significantly and sustainably increase prices or profit margins;

                      (f)  the extent to which substitutes are available in the market or are likely to be available in the market;

                     (g)  the dynamic characteristics of the market, including growth, innovation and product differentiation;

                     (h)  the likelihood that the acquisition would result in the removal from the market of a vigorous and effective competitor;

                      (i)  the nature and extent of vertical integration in the market.

             (4)  Where:

                     (a)  a person has entered into a contract to acquire shares in the capital of a body corporate or assets of a person;

                     (b)  the contract is subject to a condition that the provisions of the contract relating to the acquisition will not come into force unless and until the person has been granted a clearance or an authorization to acquire the shares or assets; and

                     (c)  the person applied for the grant of such a clearance or an authorization before the expiration of 14 days after the contract was entered into;

the acquisition of the shares or assets shall not be regarded for the purposes of this Act as having taken place in pursuance of the contract before:

                     (d)  the application for the clearance or authorization is disposed of; or

                     (e)  the contract ceases to be subject to the condition;

whichever first happens.

             (5)  For the purposes of subsection (4), an application for a clearance shall be taken to be disposed of:

                     (a)  in a case to which paragraph (b) of this subsection does not apply--at the expiration of 14 days after the period in which an application may be made to the Tribunal for a review of the determination by the Commission of the application for the clearance; or

                     (b)  if an application is made to the Tribunal for a review of the determination by the Commission of the application for the clearance--at the expiration of 14 days after the date of the making by the Tribunal of a determination on the review.

          (5A)  For the purposes of subsection (4), an application for an authorisation is taken to be disposed of 14 days after the day the Tribunal makes a determination on the application.

             (6)  In this section:

"market " means a market for goods or services in:

                     (a)  Australia; or

                     (b)  a State; or

                     (c)  a Territory; or

                     (d)  a region of Australia.



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