Applications by Tabcorp Holdings Limited [2017] ACompT 5

AUSTRALIAN COMPETITION TRIBUNAL

Applications by Tabcorp Holdings Limited [2017] ACompT 5 File numbers: ACT 1 of 2017 ACT 3 of 2017

Tribunal: MIDDLETON J (PRESIDENT) MR GF LATTA AM (MEMBER) DR DR ABRAHAM (MEMBER)

Interveners: Tatts Group Limited CrownBet Pty Ltd Racing Victoria Limited Harness Racing Board, trading as Harness Racing Victoria Greyhound Racing Control Board, trading as Greyhound Racing Victoria Racing.Com Pty Ltd

Date of Determination: 22 November 2017

Catchwords: AUTHORISATION – authorisation under s 95AT of the Competition and Consumer Act 2010 (Cth) for the acquisition of shares in the capital of a body corporate or to acquire assets of another person that is a competitor in the market – the net public benefits test MARKET DEFINITION – describing pro-competitive and anti-competitive effects with reference to the relevant markets – definition of price in wagering markets – the application of the hypothetical monopolist test of substitutability where the definition of price is in dispute – effect of the proposed acquisition in the markets for consumer wagering, acquisition of government wagering licences, racing media, gaming machine services, lotteries services, Keno services – consideration of conduct by vertically integrated firms that affects more than one market BENEFIT TO THE PUBLIC – identification of public benefits – consideration of public benefits of proposed acquisition – review of claimed public benefits – assessment of standard to be applied in assessing public benefit – likelihood, substance and durability of claimed public benefits – robust and commercially realistic estimates – timelines when estimating public benefits – verifying estimates of public benefits – assumptions underlying estimates to be disclosed to the Tribunal –modelling public benefits – economic transfers – integration costs and integration risk – quantifying public benefits claimed by an applicant – assessing the flow-through of benefits from the applicant to the wider community – weighing public benefits DETRIMENT TO THE PUBLIC – public detriments arising from any lessening of competition –public detriments unrelated to anti-competitive outcomes of the proposed acquisition – identification, consideration, review and assessment of public detriments of proposed acquisition – weighing public detriments according to their distribution within the community – quantifying public detriments claimed by interveners and the ACCC FUTURE WITH AND WITHOUT – consideration of the future with and without the proposed acquisition – merger specificity – deciding which counterfactual to adopt where the future regulatory framework is uncertain – consumer trends – market disruption and an uncertain future – where the future with the proposed acquisition includes a s 87B undertaking offered by the applicant as a condition of authorisation addressing potential competitive detriment NET PUBLIC BENEFITS TEST – degree of satisfaction required – significant increase in the real value of exports – significant substitution of domestic products for imported goods – all other relevant matters that relate to the international competitiveness of any Australian industry – weighing public benefits against public detriments – authorisation in the context of regulated markets – conditions of authorisation – interaction between s 95AT authorisation and the objects of the Act – interaction between s 95AT authorisation and s 50 INTERVENERS – reasons for granting leave to intervene – contributions by interveners to Tribunal proceedings CONFIDENTIALITY – commercial necessity of confidentiality – hierarchy of confidentiality protection to ensure that the Tribunal is fully informed