Exit strategy
Entrepreneurs and startup founders are worried about collateral damage from Labor's newly announced merger reforms. But don't expect any sympathy from Rod Sims.
“Of course there are a lot of startups that want to exit, that’s why they do things,” former competition regulator Rod Sims quipped to Capital Brief on the sidelines of an address by Treasurer Jim Chalmers today.
“But we can’t have a whole lot of companies starting up and all wanting to sell to the dominant player. If it substantially lessens competition then it shouldn’t go ahead, I think it’s really that simple. So I don’t have any sympathy for that argument.”
In the annual Bannerman lecture, Chalmers announced sweeping reforms to Australia’s merger system that have been eagerly anticipated by dealmakers, lawyers and economists. The changes are ultimately designed to solve one of the biggest problems in the Australian economy: the high concentration of big businesses that wield enormous market power in their industries. That problem, Sims and others would argue, stems from a merger system that was too weak in the past, allowing for too many anti-competitive deals to go through.
The concern, though, is Chalmers' latest changes could indirectly end up hurting the very people trying to inject more dynamism into the economy: entrepreneurs and startup founders.
