Most coverage of Australia's competition reforms has focused on what to file and when under the ACCC's recently implemented mandatory merger regime. The more useful question for organisations operating in Australian markets, including international investors, is how to make confident commercial decisions inside a regulatory environment that has moved toward broader and earlier oversight of transactions, increased regulatory intervention and activism for anticompetitive conduct, and more robust sector-specific regulation.
A change in regulatory architecture, and a change in posture
On 1 January 2026, Australia's voluntary, informal merger clearance system was replaced by a mandatory and suspensory regime administered by the Australian Competition and Consumer Commission, a shift that brings Australia into closer alignment with other major OECD jurisdictions. Acquisitions that meet prescribed thresholds and have a connection to Australia must be notified to the ACCC and cannot complete until the regulator clears them or grants a waiver. A transaction implemented without clearance is automatically void, in addition to exposing the parties to substantial penalties.
The mechanics of that regime have been thoroughly mapped by every major Australian firm and by the regulator itself. They are not the substance of what has changed. The more meaningful shift sits behind the new regulatory architecture: a deliberate move toward earlier engagement, broader capture and increasingly public processes in respect of reviewing transactions, and an increasing willingness by the regulator to look closely at, and intervene in, transactions that under the previous regime would have attracted limited attention. Put simply, the regulatory framework has empowered the ACCC to become increasingly interventionist across the remit of its responsibilities, particularly in respect of merger control. The discretion once afforded to parties around whether to proactively engage has been all but eliminated.
Several parallel developments reinforce the same direction. The maximum civil penalty for breaches of the Competition and Consumer Act 2010 (Cth) has been doubled from A$50 million to A$100 million per contravention, greatly increasing the deterrence settings across the regime, not only in respect of mergers but also cartel conduct, anti-competitive behaviour, misuse of market power, and serious breaches of the Australian Consumer Law. The Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026 has been introduced, proposing a general prohibition on unfair conduct toward consumers and tighter rules on subscription, drip pricing and disclosure practices and a landmark ex-ante digital competition regime that empowers the government to designate "digital gatekeepers" subject to service specific codes of conduct has been advanced.
The Foreign Investment Review Board continues to apply heightened scrutiny to acquisitions touching national security businesses, national security land, critical infrastructure and sensitive technology, with the Treasurer's call-in and last resort powers extending the regulatory horizon well beyond completion. There is an increasing focus on the tax arrangements of multinationals alongside heightened concerns over data security as well as audits to ensure strict adherence to approval conditions. The Treasurer has actively used divestment powers to protect the national interest and ensure diverse supply chains and the Federal Court ordered a landmark A$14 million penalty against foreign investors for repeatedly failing to comply with a disposal order.
Each reform and intervention is meaningful in itself. Taken together, they describe a regulatory environment in which active oversight is the working assumption, not the exception.
The legal questions are no longer about whether a transaction will be reviewed. They are about how organisations make confident commercial decisions inside a system that now reviews more, earlier, and with less of the privacy that the informal merger regime once afforded.
What is genuinely new
The substantive prohibition remains fundamentally the same, though it has been clarified to meet modern market challenges. Section 50 of the Competition and Consumer Act continues to prohibit acquisitions that have the effect or likely effect of substantially lessening competition in any market in Australia, a test which now explicitly includes acquisitions that create, strengthen, or entrench a substantial degree of market power. The primary change is in the architecture surrounding that prohibition: a shift from a voluntary enforcement model to a mandatory and suspensory notification regime, placing rigorous practical disciplines upstream of any transaction.
Five practical shifts are now visible in advisory work.
How the new regime is operating
The early operation of the regime has produced useful signals. The waiver process, which was intended to provide a fast pathway for transactions raising no competition concerns, has proved more cautious than parties had hoped. A meaningful proportion of early waiver applications have been refused, with the ACCC focusing in particular on transactions in vertically integrated or rapidly evolving markets where the scope for foreclosure or unanticipated dynamic effects is harder to dismiss on the papers. Transactions that fit the waiver criteria can still benefit from the process, but it is not the default route many parties had assumed.
The ACCC has also signalled the substantive areas it intends to prioritise in its enforcement and review work for 2026 and 2027. These include cost-of-living concerns in essential services and retail; conduct and concentration in the supermarket sector; competition in aviation; environmental and sustainability claims, including greenwashing; and conduct affecting trust in the digital economy. Mergers that touch these areas should expect close attention, and parties should anticipate that the substantive case for clearance will need to be made with more specificity than was customary under the informal regime.
The ACCC is moving beyond mere oversight toward a more assertive stance targeting high-impact misconduct and intervening decisively where accountability is required FIRB and the ACCC are increasingly working in parallel rather than in sequence. From 1 January 2026, the FIRB process is deeply integrated with the ACCC's new mandatory merger regime, requiring more detailed data upfront for foreign investors. The Government has indicated that information provided to the ACCC will be largely sufficient for the competition aspects of the foreign investment process, which removes some duplication. The practical effect for foreign acquirers is that two regulatory tracks now run alongside each other, and timing assumptions in transaction documents need to reflect the slower of the two, not the average. Sequencing of applications, consistency of information across regulators, and management of conditionality across approvals are increasingly important to overall completion risk.
Decision-making inside the new constraint
The discipline that distinguishes well-run transactions in this environment is no longer the technical question of whether a notification is required. That is now a relatively bounded analysis. The discipline is upstream of the deal: how organisations make acquisition decisions when the ACCC's involvement is a near-certainty, and how they preserve commercial optionality through a process that is more public, more contested and less negotiable than the one it replaced. The "real" winning or losing happens in the months of preparation before the notification is accepted as complete. Assessing the regulator's possible theories of harm is as important as financial due diligence.
Several considerations follow. Strategic plans that contemplate a sequence of acquisitions in a single market need to anticipate the aggregation rules from the outset, rather than treating each transaction as a discrete clearance question. Transaction timetables need to be set against statutory review periods that begin when the ACCC accepts a notification as complete, not when the parties consider it filed. Board reporting on competitive position, market share and rivalry is best drafted with the understanding that those documents may be read in the future by a regulator with full discovery powers and considerable analytical resource. Document hygiene is no longer just about administrative record-keeping: they are either your most powerful competitive advantage or your greatest strategic burden.
Risk allocation within transaction documents is also under pressure. Reverse break fees, divestiture pre-positioning and hell-or-high-water commitments, once associated with the largest cross-border transactions, are appearing in mid-market Australian deals because the regime makes that allocation necessary. Sellers are absorbing more clearance risk because the ACCC will not engage confidentially with multiple bidders. Buyers are seeking more information, earlier, because they need to assess substantive competition risk before exclusivity is granted, not after.
The wider regulatory environment
Merger reform is the most visible element of a broader recalibration. The increase in maximum penalties under the Competition and Consumer Act lifts the deterrent settings across the regime. The Unfair Trading Practices Bill, if passed in its current form, will introduce a general prohibition on conduct that manipulates or distorts consumer decision-making, including pricing presentations, subscription friction and certain digital design choices, alongside specific subscription and drip-pricing rules. The ACCC has indicated it will enforce that regime actively from commencement.
Regulatory oversight has shifted from a reactive safeguard to an active, foundational component of strategic planning.
The foreign investment regime continues to evolve in the same direction. National security businesses and national security land attract a nil monetary threshold. The Treasurer's call-in and last resort powers can extend the review window well beyond completion. The ATO Register of Foreign Ownership of Australian Assets imposes prompt reporting obligations on a wide range of acquisitions. None of this is hostile to inbound investment. Foreign capital remains actively encouraged, and Australia continues to be one of the most open developed economies for international investors. The regulatory environment that overlays that openness has, however, become more capable, more coordinated and more visible.
Organisations that engage early, document carefully and treat regulatory engagement as a strategic discipline rather than a procedural step are better positioned in this environment than those that do not.
What this means for institutions
1. M+A strategy and clearance are now a single exercise
The acquirer's identity, footprint and recent transaction history all bear on whether a deal is notifiable, how long it will take to clear and whether it can complete at all. For foreign investors, FIRB and ACCC processes also need to be coordinated as parallel rather than sequential workstreams.
2. Documents prepared today are evidence tomorrow
Board papers, strategy materials and internal models prepared in the ordinary course become disclosable once a notification is filed, and may be reviewed by the regulator beyond the immediate transaction. Document discipline in the ordinary course of business now has direct merger clearance consequences.
3 Risk allocation in deal documents is shifting
Reverse break fees, divestiture pre-positioning, hell-or-high-water commitments and revised conditions precedent are working their way into mid-market transactions because the regime makes that allocation necessary. Sellers are bearing more clearance risk because confidential ACCC engagement is no longer available.
The decision that matters now
The institutions that adapt most successfully to the reformed environment will not necessarily be the ones with the largest internal compliance functions or the most extensive regulatory contacts. They will be the ones that understand the change in posture and adjust their commercial decision-making accordingly. M+A strategy that assumes a benign or predictable clearance environment is no longer realistic. Strategy that begins from the regulatory constraint and works outward is. Crucially, in a landscape defined by doubled penalties and a movement towards ex ante or enhanced sector-specific regulation, this strategy must be underpinned by proactive competition and consumer law compliance that identifies and mitigates conduct risk at the point of commercial inception, rather than treating regulatory scrutiny as an after-the-fact hurdle.
Australia's reformed merger clearance framework is now in steady operation, and the parallel reforms in consumer protection, foreign investment and penalties are reinforcing the same direction. Organisations that treat this as a settled environment to be navigated, rather than a temporary disruption to be waited out, will make better decisions about acquisitions, about market conduct and about how they approach the regulator when engagement becomes necessary.
Competition reform is no longer a process question. For organisations active in Australian markets, including international investors, it is a question of how strategic decisions are made when the regulatory environment has moved permanently toward earlier, broader and more public oversight.
Thomsons partners with Australian and international clients to navigate the complexities of the Australian regulatory landscape. We provide strategic counsel across the full spectrum and lifecycle of competition law: from securing clearance for transformative M&A and managing foreign investment sensitivities to defending high-stakes ACCC investigations and competition litigation. Our expertise bridges the gap between commercial objectives and regulatory constraints, offering a sophisticated suite of solutions that includes pre-notification advocacy and strategy, the design of bespoke competition and consumer compliance frameworks, and the mitigation of institutional exposure in domestic and multi-jurisdictional enforcement actions. We provide the insight to help you navigate that environment with confidence.