By Poppy Johnston in Canberra

AUSTRALIANS could be stuck paying more for goods and services if upcoming merger reforms do not go far enough to stamp out anti-competitive deals. 

The consumer watchdog has been pushing for tougher rules to stop companies from joining forces if there’s a risk they will gain too much market power and has now warned that two of Treasury’s proposed models for fixing the problem are not up to scratch.

“Evidence shows that Australia’s economy is being impacted by weakened competition in many sectors, risking higher prices for consumers and businesses,” Australian Competition and Consumer Commission chair Gina Cass-Gottlieb said on Wednesday.

A Treasury consultation paper released last month outlined three options for cracking down on anti-competitive mergers, including the ACCC’s preferred model.

The consumer watchdog wants mandatory notification and approval of upcoming mergers, with some firms thought to be pushing the boundaries of the voluntary setup and offering up incomplete, incorrect and late information.

Under its preferred model, the regulator would then be able to grant clearance if it was happy the merger would not substantially dampen competition.

This differs from a second mandatory clearance option proposed by Treasury that would force the ACCC to prove the anti-competitive nature of the deal to the Federal Court.

A third option keeps the voluntary alert system in place, where firms can choose to notify the watchdog about a merger, and the ACCC would then be able to approve deals it deems suitable.

In a preliminary submission to the government’s competition policy review, Ms Cass-Gottlieb said the two other options for merger reform did not address the regulator’s underlying concerns about tactics used by firms to acquire rivals that left the ACCC with few options but to approve them.

“We shouldn’t have a process that is prey to legal brinkmanship, with all the uncertainty and expense that entails,” Ms Cass-Gottlieb said.

She said the ACCC’s pathway struck the right balance.

“The option put forward by the ACCC achieves the right balance, with minimal regulatory burden for those acquisitions that do not have anti-competitive effects, and a structured, transparent and timely process for those acquisitions where there are potential anti-competitive effects.”

Treasurer Jim Chalmers and Assistant Minister for Competition Andrew Leigh opened up consultation on new merger laws in November.

In a statement, they said existing merger rules were probably “too permissive” and were “allowing some mergers that don’t deliver benefits to consumers, workers and the wider economy”.