Giving the Green Light: The Australian Competition and Consumer Commission’s Unique Approach to Weighing Environmental Benefits in Antitrust Cases

1 Introduction

As many countries around the world have committed to transitioning their economies to net zero emissions by 2050, the intersection between competition law and environmental considerations has gained greater interest. Businesses are increasingly looking for 'green' opportunities, such as collaborations to reduce their carbon footprints and acquisitions to invest in renewable energy. These efforts can raise potential competition concerns, but Australia's competition law framework provides a clear pathway for companies to obtain comfort that they have protection from competition law enforcement in pursuit of these environmental objectives.

Australia's authorisation regime for merger and non-merger conduct stands out internationally. Not only because most regimes around the world have moved from authorisation models to 'self-assessment', but also because of the ability of the Australian Competition and Consumer Commission (ACCC) to balance competitive concerns against broader public benefits, including environmental and sustainability benefits. The ACCC has authorised a number of collaborative arrangements between competitors on the grounds of environmental benefits and, in a world first, authorised a merger in relation to which it identified anti-competitive effects on the basis that the transaction would lead to significant public benefits by accelerating the roll-out of renewable energy generation and leading to a more rapid reduction in Australia's greenhouse gas emissions. The ACCC's capacity to support environmental goals while safeguarding market integrity places Australia at the forefront of aligning competition law with sustainability priorities.

This paper is structured as follows:

• Section 2 provides an overview of the legal framework under which the ACCC has jurisdiction to authorise both merger and non-merger conduct where sufficient public benefits exist.
• Section 3 provides an overview of the ACCC's track record in authorising conduct with environmental and sustainability public benefits.
• Section 4 compares the Australian authorisation framework to the approaches taken in other jurisdictions to considering environmental benefits.
• Section 5 evaluates the benefits of the Australian approach and suggests some opportunities for further progress.

2 The ACCC's Mandate and Authorisation Powers

The ACCC views the Competition and Consumer Act 2010 (Cth) (CCA) as 'an economic law that serves important social and political objectives'. Australian competition law is not 'an end in itself', but is 'a means to enhance the welfare of Australians'.

Australia has both merger and non-merger authorisation processes whereby the ACCC can authorise acquisitions or arrangements, such as collaborations, alliances or coordination between competitors, that would otherwise be anti-competitive. Authorisation gives the applicant parties statutory protection from legal action under the CCA for the authorised conduct, including action by the ACCC as well as third parties. In an increasingly litigious jurisdiction, this is a valuable benefit of seeking authorisation.

In relation to mergers, Australia currently has a voluntary merger control regime, with no legal requirement or thresholds for notification. There are two pathways for parties to obtain 'clearance' from the ACCC: informal clearance or formal merger authorisation. The only consideration under the informal process is whether the acquisition would have the effect or likely effect of substantially lessening competition in any market in Australia (in breach of s 50 of the CCA). However, formal merger authorisation is subject to the test set out in section 90(7) of the CCA. This provision permits the ACCC to grant authorisation where either the proposed acquisition would not have the effect or likely effect of substantially lessening competition, or the proposed acquisition would result or be likely to result in a benefit to the public and the benefit would outweigh any public detriment (ie, a net public benefit). While Australia will be moving from a voluntary merger control regime to a mandatory, suspensory regime from 2026, the net public benefit assessment that exists under the current merger authorisation process will subsist under the new regime's single clearance process and will be included as a second-stage test if clearance is not granted on competition grounds.

Similarly, for non-merger conduct that may otherwise breach Australia's competition laws, the ACCC can authorise the relevant conduct if it would result in a net public benefit under section 90(7) of the CCA. The non-merger authorisation process essentially recognises market failures, ie, circumstances where competitive markets may not work to deliver the most efficient outcome and may fail to maximise total welfare. For example, in cases of market failure, restrictions on competition may achieve a more efficient outcome and therefore higher public benefit than if the market was left to operate freely. Therefore, in certain situations, the public interest may be served by authorising otherwise anti-competitive behaviour. If competitors were to proceed with collaborative action without authorisation, this may raise risks under the CCA, including possible cartel conduct in contravention of sections 45AA to 45AU of the CCA, putting the parties at risk of civil and criminal liability and individual and corporate penalties. Cartel conduct involves a contract, arrangement or understanding between competitors that:

(a) has the purpose or effect of fixing, controlling or maintaining prices for goods or services; or

(b) has the purpose of preventing, restricting or limiting the supply or acquisition of goods or services; or

(c) has the purpose of allocating customers, suppliers or territories; or

(d) amounts to bid rigging (ie, agreeing on bids, whether or not to bid, the success or otherwise of a bid, or a material component of a bid).

Collaborative action between competitors may also raise other risks under the CCA, including pursuant to:

(a) s 45 of the CCA, if the agreement has the purpose or effect of substantially lessening competition in a market or if parties share competitively sensitive information (prohibited as a 'concerted practice' if the information sharing has the purpose or effect of substantially lessening competition in a market); or

(b) s 47 of the CCA, if the agreement includes conditions regarding who the parties do business with, what business the parties do, or where the parties do business. This will only breach s 47 where the exclusive arrangement has the purpose, effect or likely effect of substantially lessening competition.

The public benefits test that the ACCC applies when assessing applications for authorisation is a broad test. Although the CCA does not expressly define or limit the public benefits which may be taken into account by the ACCC, it has been accepted that public benefits include both economic and non-economic benefits. The Australian Competition Tribunal has defined public benefit as 'anything of value to the community generally, any contribution to the aims pursued by the society, including as one of its principle elements (in the context of trade practices legislation), the achievement of economic goals of efficiency and progress'. 'Public detriment' is also undefined in the CCA, but has been given an equally broad construction as 'any impairment to the community generally, any harm or damage to the aims pursued by the society including as one of its principal elements the achievement of the goal of economic efficiency'.

In weighing public benefits and detriments, the ACCC considers the future with and without the proposed conduct. In doing so, the ACCC compares the expected state of the market with the proposed conduct (ie, the 'factual') with the likely state of the market without the proposed conduct (ie, the 'counterfactual'). In most cases, but not all, the counterfactual is the status quo.

The assessment of applications for authorisation is a public process. Applications for both merger and non-merger authorisation – which are published on the ACCC's website – must set out the details of the public benefits associated with the conduct. Public benefit claims must be substantiated, and applicants must demonstrate how those public benefits result from the proposed conduct. While the CCA does not require the ACCC to quantify numerically or arithmetically the exact level of public benefits and detriments, and the ACCC recognises that it is not possible to quantify public benefits and detriments in many cases, the ACCC encourages parties to quantify the size of claimed benefits and detriments where possible to inform the relative weight to be attributed in the ACCC's assessment. Where it is not possible to quantify public benefits and detriments, the ACCC will conduct a qualitative assessment.

The arguments put forward by the parties are tested through public consultation. The ACCC consults broadly with a range of parties that are likely to be affected by the proposed conduct. Third party submissions lodged with the ACCC in relation to the authorisation application are also published on the ACCC's website. The ACCC must make its decision on an application for merger authorisation within 90 days of a valid application being lodged, and within six months for a non-merger authorisation application. In applications for non-merger authorisation, parties may also seek urgent authorisation on an interim basis while the ACCC is considering whether to grant final authorisation.

3 The ACCC's Track Record in Authorising Conduct with Environmental Benefits

The ACCC has made clear that it is willing to take environmental factors into account as part of the net public benefit test. The ACCC recently published its final guide on sustainability collaborations and Australian competition law, which expressly recognises that the ACCC can take sustainability benefits into account as part of its assessment if those benefits are likely to result from the conduct sought to be authorised. The guide is designed to help businesses understand the competition law risks that may arise when contemplating working together to achieve positive environmental outcomes and explains how ACCC authorisation may be available to facilitate these agreements even if there are potential competition concerns. The guide gives specific examples of environmental public benefits, including reduced emissions, biodiversity benefits, reduced plastic waste and increased circularity, as well as other types of public benefits including human rights improvements, transaction cost savings and other economic efficiencies. The final guide is also supplemented by a ‘quick guide’ and a five-step checklist to help businesses swiftly evaluate competition law risks and exemption options.

The ACCC's willingness to account for environmental benefits in the net public benefit test has also been demonstrated through the ACCC's world first decision to authorise a merger in relation to which it identified anti-competitive effects on the basis of environmental public benefits as well as the numerous collaborative arrangements that the ACCC has authorised on environmental grounds.

Merger authorization: Brookfield / Origin

The ACCC has accepted environmental public benefits in one merger authorisation to date: the proposed acquisition of Origin Energy Limited (Origin)by EOS Aggregator Bermuda LP (a special purpose vehicle established for the proposed transaction, to be controlled by Brookfield)and MidOcean Reef Bidco Pty Ltd (owned by MidOcean Energy, LLC) (MidOcean) (Brookfield / Origin). Origin is a major Australian energy company involved in the generation, distribution and retail of electricity and natural gas, and also operates a gas exploration and production business which includes a 27.5% interest in Australia Pacific LNG (APLNG) (a liquefied natural gas project in Queensland). Brookfield is ultimately controlled by Brookfield Corporation, a global asset manager based in Canada. Brookfield Corporation owns a 45.4% interest in AusNet, which owns a large part of the electricity transmission network in Victoria, one of five electricity distribution networks in Victoria, and one of three gas distribution networks in Victoria. Brookfield also has a 50% interest in Intellihub, a smart metering company. MidOcean Energy, LLC is a liquified natural gas company formed by EIG Partners, an institutional investor in the energy sector. At the time of the proposed acquisition, MidOcean Energy, LLC was due to acquire a small interest in Queensland Curtis LNG (QCLNG) (a liquefied natural gas project in Queensland).

The ACCC’s review of the Brookfield / Origin merger examined both competition and public benefit considerations. The ACCC found that the proposed acquisition would have the effect of substantially lessening competition in certain markets due to the formation of vertical links between AusNet and Origin. The ACCC was concerned that Brookfield could use AusNet to discriminate against Origin's rivals, for example by delaying new connections for competing generators to AusNet's transmission network, making or influencing investment and maintenance decisions in favour of Origin, causing strategic outages of lines that competing generators use or reducing transmission service quality for competing generators. The ACCC was also concerned about horizontal competition effects due to MidOcean Group’s ownership interests in both QCLNG and APLNG.

While the ACCC noted that the public benefits and public detriments in the matter were 'finely balanced', the ACCC was ultimately satisfied that that the proposed acquisition was likely to result in public benefits that would outweigh the likely public detriments. The ACCC found that the proposed acquisition would likely enable substantial investments by Origin in renewable energy projects, which would support Australia’s energy transition and net zero targets. The ACCC took into account Brookfield's commitment to a substantial capital expenditure plan to decommission some of Origin’s coal assets and develop renewable energy assets, as well as Brookfield's global renewables expertise, procurement scale advantage and other financial, reputational and commercial incentives to deliver the proposed renewable build out. The ACCC also accepted that Origin's large retail customer base supported the investment and acceleration of the proposed build out, as it removed the need to negotiate offtake arrangements, which can increase time and project costs.

Furthermore, the authorisation was conditional on undertakings provided by AusNet, Brookfield and MidOcean which required functional separation and anti-discrimination measures, information sharing controls and reporting obligations in relation to the renewable build out. These undertakings were important in achieving a net public benefit: the ACCC's view was that the undertakings reduced the likelihood of some public detriments and increased the likelihood of some public benefits, which resulted in a net public benefit overall.

The Brookfield / Origin merger authorisation decision demonstrates the complex balancing act that the ACCC undertakes in weighing environmental benefits while safeguarding competition and consumer interests in the Australian market. Ultimately, while environmental benefits do not automatically override competition considerations, they are increasingly important in the ACCC’s decision-making process.

Non-merger authorization: Product stewardship schemes

In recent years, the ACCC has authorised collaborative conduct on environmental grounds on a number of occasions. As above, parties often seek authorisation for such arrangements to guard against contravention of the cartel provisions and other prohibitions in the CCA.

One common type of authorisation sought from the ACCC on environmental grounds is for product stewardship schemes, where businesses take responsibility for the environmental impact of their products throughout the entire product lifecycle. These schemes generally focus on reducing waste, promoting recycling and ensuring safe disposal. Responsibility is often shared between manufacturers, retailers and consumers, usually through the imposition of a levy on the relevant product. Some recent examples of product stewardship schemes that the ACCC has authorised include:

• (a) ResiLoop Limited (interim authorisation granted August 2024): To establish and operate a voluntary, industry-led product stewardship scheme to collect and recycle resilient flooring waste. In its interim authorisation decision and draft determination, the ACCC considered the following public benefits: environmental benefits from reducing resilient flooring going to landfill; benefits arising from research and development into resilient flooring end-of-life products; pricing to better reflect the externalities of resilient flooring disposal; and increased job opportunities.
• (b) Coles Group on behalf of itself and participating supermarkets (authorisation initially granted June 2023, further interim authorisation granted July 2024): To collaborate via an industry-led 'Soft Plastics Taskforce', to mitigate suspension of the REDcycle soft plastics recycling program. The ACCC considered the following public benefits: development of more efficient, temporary soft plastic recycling solutions; maximisation of recycling efficiency to divert soft plastics away from landfill; and promotion and consumer awareness on recycling directions and initiatives.
• (c) Australian Bedding Stewardship Council (authorisation granted October 2022): To establish and operate a voluntary, industry-led product stewardship scheme, ‘Recycle My Mattress’, to increase resource recovery and the diversion of waste from landfill and minimise the environmental and health and safety impacts of end-of-life mattresses. The ACCC considered the following public benefits: minimisation of environmental, health and safety impacts of end-of-life mattresses by encouraging changes in consumer behaviour; pricing that better reflects the cost of supply and disposal of mattresses; and employment opportunities for people who experience social disadvantage, by facilitating greater recycling.
• (d) Paintback Limited (authorisation initially granted October 2015; reauthorised May 2021): To impose a levy on the wholesale sale of certain architectural and design paints (A&D paint) to fund the Paintback scheme, a nationally co-ordinated approach to the collection and disposal of A&D paints. In its most recent decision re-authorising the scheme, the ACCC considered the following the following public benefits: environmental benefits from the reduction in improperly disposed of waste A&D paint; and cost efficiencies from the scheme compared to a number of separately operated schemes operating on a more limited scheme through economies of scale.
• (e) Battery Stewardship Council (authorisation granted September 2020): A national voluntary battery stewardship scheme that would fund the costs of collecting, sorting and recycling batteries at end of life. The ACCC considered the following public benefits: significant environmental benefits through increasing the number of batteries that will be appropriately recycled; increased public awareness of battery disposal and re-use; and supporting increased innovation, research and development.

See also authorisations granted to Refrigerant Reclaim Australia Limited, Tyre Stewardship Australia Limited and AgStewardship Australia Limited.

Non-merger authorisation: Collective bargaining and joint procurement arrangements

Another type of conduct for which ACCC authorisation is commonly sought is for collective bargaining or joint procurement arrangements. Some recent examples of ACCC authorisation for these types of arrangements on environmental grounds include:

• (a) 1Circle Pty Ltd and Ors (authorisation granted March 2024): To establish a joint renewable energy buying group. The ACCC considered the following public benefits: environmental benefits through a reduction in greenhouse gas emissions as a result of the group members being able to achieve a faster or more extensive transition to renewable energy at lower cost and with less risk than if they each sourced renewable electricity individually; and transaction cost savings for both the group members and potential retail electricity suppliers as a result of the joint tender process.
• (b) Metropolitan Waste and Resource Recovery Group (authorisation granted February 2022): To establish a collaborative tender process for procuring recyclable waste sorting services for participating councils. The ACCC considered the following public benefits: higher quality and greater variety of recyclable resources recovered; increased recycling and resource recovery rates; greater diversion of recyclable waste from landfill; and alignment with overarching government policy to reduce waste and increase resource recovery.
• (c) Equinix (Australia) Enterprises Pty Ltd & Ors (authorisation granted August 2021): Joint procurement process for an aggregated hedged volume of electricity and equivalent volume of 'Green Products'. The ACCC considered the following public benefits: environmental benefits through a reduction in greenhouse gas emissions; transaction cost savings; and greater investment in and competition for electricity supply.

4 The ACCC's Approach Compared to Other Jurisdictions

The authorisation regime for merger and non-merger conduct in Australia is largely unique. Apart from a similar authorisation approach in New Zealand, it is not common for regulators to be able to expressly authorise potentially anti-competitive mergers and collaborative conduct between competitors on the basis of broad public benefits, including environmental benefits. This is despite the fact that antitrust regulators around the world are increasingly turning their attention to the role of environmental and sustainability considerations in competition analysis and the principles of the total welfare standard underpinning competition law frameworks.

Merger analysis

In a number of jurisdictions, there may be scope for regulators to consider environmental benefits in mergers albeit through narrow tests based on economic efficiency. For example, in the United Kingdom (UK), the Competition and Markets Authority (CMA) can approve a merger that would substantially lessen competition if the parties can prove that the deal would create merger efficiencies (in the form of either rivalry-enhancing efficiencies or relevant customer benefits) that outweigh the anti-competitive harm. In its Merger Assessment Guidelines, the CMA notes that 'benefits in the form of environmental sustainability and supporting the transition to a low carbon economy are relevant customer benefits in some circumstances'. Similarly, in Europe, the legal framework allows for efficiencies substantiated by the merging parties to be taken into account, and the European Commission (EC) has indicated that 'sustainability-related aspects may play a role in the assessment of merger cases when it comes to efficiency considerations'.

Apart from Australia, some jurisdictions do allow mergers to be considered through the lens of a broader public benefits test. For example, the New Zealand Commerce Commission has a similar ability to the ACCC to authorise mergers based on a net public benefit test. While the New Zealand Commerce Act merely requires consideration of efficiencies that are likely to arise from the relevant conduct in assessing public benefits, according to the New Zealand Commerce Commission's authorisation guidelines, environmental benefits as well as health, media and social welfare benefits can be taken into account when making a decision on a merger. The South African Competition Commission must also assess the impact of a proposed merger on 'public interest grounds'. While the factors to be considered by the Commission when determining whether a merger can be justified on public interest grounds do not expressly include the assessment of environmental factors, some in the South African Competition Commission have expressed the view that these factors are 'broad enough to allow these benefits to be taken into account'.

Assessment of non-merger conduct

In a similar way, in several overseas jurisdictions, there is limited scope for public benefit arguments in the context of assessing the competitive effects of non-merger conduct. Any public benefit assessment is usually based on narrow exemptions for anti-competitive agreements. Given the 'fine line' between preventing anti-competitive conduct and hindering the benefits of genuine sustainability initiatives, a number of competition authorities have issued targeted guidance that seeks to mitigate reluctance on the part of businesses to collaborate for sustainability purposes.

In June 2023, the EC adopted revised horizontal block exemptions regulations (HBERs) and issued accompanying Horizontal Guidelines to clarify the circumstances under which agreements between competitors that pursue genuine sustainability objectives do not contravene European Union (EU) competition rules. The updated Horizontal Guidelines include a chapter dedicated to sustainability agreements in a bid to clarify that the EU's antitrust rules, in particular Article 101(1) of the Treaty on the Functioning of the European Union (TFEU), do not prevent the implementation of agreements between competitors that pursue a sustainability objective. A sustainability agreement that restricts competition within the meaning of Article 101(1) of the TFEU can benefit from the exception in Article 101(3) if the parties can show that the following four conditions within that provision are satisfied:

• (a) the agreement contributes to improving the production or distribution of goods or contributes to promoting technical or economic progress;
• (b) the agreement must not impose restrictions of competition that are not indispensable to the attainment of the benefits generated by the agreement;
• (c) consumers receive a fair share of the claimed benefits; and
• (d) the agreement must not allow the parties the possibility to eliminate competition in respect of a substantial part of the products in question.

A unique feature in the EU is the 'soft safe harbour' established for sustainability standardisation agreements, which are agreements used to specify requirements that products, processors, distributors, retailers or service providers in a supply chain have to meet in relation to a wide range of sustainability metrics, such as CO2 emissions or recycling rates. The 'soft safe harbour' recognises the fact that these types of agreements often have positive effects on competition and for consumers. To benefit from a 'soft safe harbour', a number of conditions must be satisfied.

Businesses contemplating entering into sustainability agreements in the EU are only able to seek informal guidance from the EC in the form of a guidance letter under specific circumstances. Businesses are considered to be 'well placed to assess the legality of their actions in such a way as to enable them to make an informed decision on whether to go ahead with an agreement or unilateral practice and in what form'. However, in cases of 'genuine uncertainty', parties can seek informal guidance from the EC which will assess the validity of the request and issue a guidance letter where the assessment raises novel or unresolved questions or would provide added value with respect to legal certainty. In any case, the EC Guidelines make clear that these written statements are just guidance and applicants remain responsible for carrying out their own self-assessment of the conduct under the TFEU. Unlike ACCC authorisation that may grant protection from legal action, the guidance letters issued by the EC do not create any rights or obligations for the applicants or any third party and the relevant arrangements remains open to challenge. The guidance letters do not represent a decision by the EC and do not bind Member States' competition authorities or courts that have the power to apply Articles 101 and 102 of the TFEU.

In October 2023, the UK CMA published guidance on the application of Chapter 1 of the UK Competition Act 1998, which prohibits agreements between businesses that are restrictive of competition, to agreements relating to environmental sustainability between competitors (UK Green Agreements Guidance). According to the UK Green Agreements Guidance, environmental sustainability agreements which have the object or effect of restricting competition are prohibited unless the agreement is exempt under section 9(1) of the Competition Act 1998 on the basis that the benefits of the agreement outweigh the competitive harm. Almost identical to the approach in the EU, to benefit from this exemption, parties must be able to demonstrate that their agreements meets each of the following four conditions:

• (a) the agreement must contribute to certain benefits, namely improving production or distribution or contribute to promoting technical or economic progress;
• (b) the agreement and any restrictions of competition within the agreement must be indispensable to the achievement of those benefits;
• (c) consumers must receive a fair share of the benefits; and
• (d) the agreement must not eliminate competition in respect of a substantial part of the products concerned.

Notably, to benefit from the relevant exemption in both the EU and UK, consumers of the products or services to which the agreement relates must receive a fair share of the public benefits. The contrasts to the position in Australia where there is no requirement that the public benefits from an agreement flow back to the consumers impacted by that agreement although the more any benefits can be identified and quantified in a concrete manner, the greater the potential benefit and the more likely the benefits are to outweigh and detriments. However, this slight difference in approach means the ACCC can take broader sustainability benefits into account that flow to society generally, with a particular focus on public benefits to Australians, even if it is more difficult to precisely identify which flow to consumers directly.

The CMA also has an 'open-door policy' for informal guidance on sustainability agreements. This involves a 'light touch review' proportionate to the size, complexity and likely impact of the agreement, conducted on the basis of publicly available information and information shared with the CMA by the businesses. Under this process, the CMA indicates any options, concerns, risks and possible solutions available to the parties in relation to the proposed agreement. In some circumstances, the CMA may agree adjustments with the parties that should be made to the agreement before it is implemented. The CMA has stated that it will not take enforcement action against an agreement discussed with the CMA in advance and where the CMA did not raise concerns (or where those concerns were addressed by the parties). However, while the 'open-door policy' does afford businesses some protection, the CMA has clarified that the policy's purpose 'is not to provide a definitive statement on the legality of an agreement, but to provide clarity on the application of the Guidance, and comfort on the CMA's expected approach to taking enforcement action'. As of November 2024, the CMA has published two informal opinions under the 'open-door policy'. Given CMA informal assessment does not constitute a definitive conclusion as to the legality of the agreement in question, it would seem that third parties are not precluded from bringing legal action, whether or not the parties sought informal guidance from the CMA. However, this has not yet occurred. Further, despite any informal assessment by the CMA, if it subsequently transpires that the relevant agreement appreciably restricts competition, the parties will be required to consult with the CMA regarding adjustments to 'bring the agreement to the right side of competition law'.

Following in the footsteps of its international peers, as set out above, the ACCC published its final guide on sustainability agreements in December 2024 to make it 'clear that competition law need not be a barrier for those considering sustainability collaborations that benefit the public'. The final guide followed the ACCC's release of its draft guide for consultation in July 2024 in response to which the ACCC received over 35 submissions. In addition to providing guidance to businesses on when sustainability collaborations are likely to breach the CCA and when they are unlikely to do so, the ACCC's final guide goes into detail about the ACCC's authorisation process, including examples of types of sustainability benefits that the ACCC will take into account. The final guide is also accompanied by a 'quick guide' and five-step checklist to assist businesses to quickly assess their competition law risk and exemption options.

5 Assessment of the Australian Approach

The Australian authorisation process and the ACCC's approach to the net public benefit test provides parties wishing to make acquisitions with environmental benefits or to enter into sustainability agreements with a clear pathway to proceed with such arrangements, while at the same time mitigating the competition law risks of these arrangements, by providing immunity from ACCC investigation and third-party action. Businesses are able to make their case to the ACCC on the basis of real, verifiable and significant environmental benefits, without being required to precisely quantify the benefit as is the case in other jurisdictions. While still maintaining a rigorous and evidence-based approach, the ACCC can take a qualitative approach where required, and is afforded sufficient discretion to weigh any claimed benefits against potential public detriments within the specific circumstances of the particular case, product, service or industry.

The ACCC's authorisation process also provides greater certainty to parties about their exposure to enforcement action in relation to non-merger conduct by definitively 'authorising' a collaborative arrangement on public benefit grounds and necessarily making a declaration as to its legality. With the ACCC's approval and exemption granted, businesses can focus on implementing the sustainability measures in question and generating the desired outcomes for the environment, safe from the risk of ACCC or third-party action.

However, opportunities exist to further streamline the ACCC's authorisation process to make it easier for parties with regard to certain types of sustainability agreements or to reduce the upfront burden of information requirements. As discussed above, the EC Guidelines establish a 'soft safe harbour' for sustainability standardisation agreements where particular conditions are met. To further encourage the swift adoption of widespread sustainable practices by businesses in Australia, the ACCC could similarly grant a 'class exemption' under section 95AA of the CCA in relation to similar sustainability standardisation agreements. Alternatively, there is scope for the ACCC to delineate particular types of arrangements (for example, sustainability standardisation agreements) by requiring a shorter review period or less information requirements for those particular arrangements. There may also be scope to reduce the burden of upfront information requirements for a broader range of authorisation applications, such as smaller entities, not-for-profits or particular arrangements that are unlikely to raise competition concerns.

Nevertheless, the ACCC's authorisation process generally provides businesses with flexibility and certainty. The number and variety of sustainability arrangements authorised by the ACCC has proved the authorisation process to be a robust and transparent framework capable of accommodating mergers and collaborative arrangements on environmental grounds when considered in the broader context of public good and public detriment.

6 Conclusion

As increasing numbers of businesses seek to collaborate around environmental and sustainability projects, there has necessarily been an increased focus on what kinds of acquisitions and collaborations could be authorised notwithstanding the competition law risks of doing so. Frameworks in other jurisdictions have a narrower focus on economic efficiency and competitive analysis. Through its broad public benefit test, the authorisation process in Australia provides a pragmatic framework that enables businesses to seek approval for both merger and non-merger conduct that serves societal and environmental objectives while addressing traditional competition law considerations. Nonetheless, as the antitrust world continues to grapple with balancing competitive markets and environmental benefits, a continued examination of alternative international approaches is an important way of continually assessing the effectiveness of the Australian approach and of facilitating international consistency as sustainability initiatives and practices are likely to continue into the future.