PNG’s competition and consumer watchdog, the Independent Consumer and Competition Commission (ICCC), will be in a better position to regulate and monitor potentially anti-competitive business acquisitions following recent amendments to the Independent Consumer and Competition Commission Act 2002 (the Act).
The amendments introduce a mandatory obligation to notify and seek clearance for any proposed acquisition with a transaction value of more than PGK50 million or where a proposed acquisition is or would likely increase the acquirer’s market share to 50% or more. On notification, the ICCC can either clear or decline the acquisition or it can direct the acquirer to seek authorisation.
The amendments are a significant shift in the merger control regime in PNG and are bolstered by the imposition of a default penalty of PGK750,000 for non-compliance.
Prior to the amendments, the notification process was voluntary and required some goodwill on the part of an acquirer as it was left to the acquirer to judge whether the acquisition might offend the Act and whether it should approach the ICCC, let alone seek clearance or authorisation. This resulted in numerous acquisitions occurring without the ICCC’s prior knowledge or involvement and meant the ICCC had to take court action if it wished to examine or challenge the acquisition.
What this means for PNG businesses and investors is they need to be more rigorous in their assessment of the potential impacts on competition of any proposed acquisition and will need to factor in the added costs and impact on timing a notification will have on the transaction.
For more information, please contact one of our team.