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Australian Competition Tribunal releases reasons for authorising Sea Swift's proposed acquisition of Toll marine freight business

2 minutes  05.08.2016 Geoff Carter, Miranda Noble, Paul Schoff

Faced with a choice between economic theory vs economic fact, the Australian Competition Tribunal (the Tribunal) has decided strongly in favour of fact, concluding that 'theory must give way to fact'.

On 28 July 2016, the Tribunal released reasons for its recent determination to authorise Sea Swift's proposed acquisition of certain shares and assets relating to Toll Marine Logistics' (TML) business in the Northern Territory (NT) and Far North Queensland (FNQ).

The Tribunal found not only that there was no substantial lessening of competition, but no competitive detriment at all (other than some detriment in relation to one landing facility which was addressed through a s87B undertaking), and further found that there were significant public benefits.

MinterEllison acted on behalf of Toll Holdings Ltd.

This is the fourth merger litigated to obtain competition clearance in the last 10-15 years and the fourth time the ACCC has lost.

  • Authorisation is increasingly becoming a viable alternative to the ACCC's informal clearance process in appropriate cases. 
  • A key thread of the Tribunal's reasons is that fact must be favoured over theory. The Tribunal placed great weight on commercial reality, rather than 'theoretically based speculation' put forward by the ACCC.
  • The Tribunal found not only that there was no substantial lessening of competition, but no competitive detriment at all (other than some detriment in relation to one landing facility which was addressed through a s87B undertaking) and further found that there were significant public benefits.
  • Assessing whether barriers to entry are created, maintained or heightened by a transaction remains a key element of any competitive effects analysis.
  • Conditions of authorisation can be used broadly including to establish public benefits.

We wrote about the initial Tribunal decision on 1 July in, Toll Holdings Ltd and Sea Swift successful in application for merger authorisation to the Australian Competition Tribunal.

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