The Australian Competition Tribunal has upheld the ACCC’s decision not to grant authorisation for the proposed regional spectrum authorisation arrangements between Telstra Corporation Limited and TPG Telecom Limited.
The ACCC had decided not to grant authorisation for the proposed spectrum authorisation arrangements on 21 December 2022.
The Tribunal denied authorisation because it was not satisfied that the proposed arrangements were unlikely to have the effect of a substantial lessening of competition, or that the benefit to the public likely to result would outweigh the detriment.
The Tribunal noted that the proposed arrangements would give Telstra substantial benefits and increase its market strength on the retail and wholesale mobile markets, and would undermine Optus’ incentives to invest in 5G technology. Over time, this would weaken the competitive constraint on Telstra, leading to increased prices and margins.
The Tribunal found that “the Spectrum Authorisation Agreement provides Telstra with substantial commercial and competitive benefits and would further increase Telstra’s position of market strength in mobile telecommunications markets.”
“This is the first review by the Tribunal of a merger authorisation under a new authorisation regime which came into effect in 2017,” ACCC Commissioner Liza Carver said. “The Tribunal has clarified its approach to the assessment in an authorisation context of the likely effects on competition and any benefits which are likely to result from the proposed arrangements. The Tribunal’s reasoning will assist the ACCC in considering future applications for authorisation.”