Act passed to better-equip ICCC

Parliament yesterday passed an amendment to the business acquisition provisions of the Independent Consumer Competition Commission (ICCC) Act which will enable it to be better-equipped to regulate and monitor anti-competitive transactions in the economy.
Deputy Prime Minister and Treasurer Charles Abel, in his statement to Parliament yesterday, said the amendment would have its own prescribed penalties for non-compliance of the mandatory notification provisions and would also enable the ICCC to remove or amend an authorisation that had granted mergers or acquisitions.
Abel said the amendment had proposed thresholds that would trigger mandatory notification.
He said having dealt with many applications for clearance and authorisation (since 2003), ICCC’s experience in this area allowed it to create the thresholds in such a way where it would not be inundated with applications to clear because the thresholds targeted a particular benchmark of acquisition.
“It has been ICCC’s experience that most acquisitions that entail competitive concerns involve larger corporations that hold a significant degree of market share,” Abel said.
“At that level of business, transaction values as we can expect are equally high. This is why ICCC has set the transactions value at K50 million.
“It is basic company law that the more shares a person has in a company, the more influence they can exert in decision-making, especially by way of voting rights.”
Abel said ICCC decided to incorporate a benchmark for shares transfer at 40 per cent.
He said having a larger share of the market could lead to having a substantial degree of market power.
The ICCC Act does not prohibit businesses from having a substantial degree of market power; it only prohibits abuse of that market power under Section 58.
“It has been ICCC’s experience that for larger corporations in PNG, there is subtle abuse of market power being exerted over smaller players in the same line of business.
“In a mandatory system of notification, the ICCC would be in a better position to review whether the increase in the market share will pave the way for abuse of market power post-acquisition,” Abel said.