Joshua Gans has replied to my comments on the ACCC draft merger guidelines on his blog site. While my comments touched on several aspects of the draft guidelines, Gans only deals with one, which is the guidelines’ emphasis on vertical mergers. In my comments, I suggested that this emphasis was difficult to understand, as vertical mergers rarely raise competition issues (and more often promote efficiency).

The ACCC’s draft new Merger Guidelines (“the Guidelines”) are long overdue and, even if for that reason alone, should be welcomed. The Commission’s previous Guidelines, issued in 1999, were the culmination of a lengthy process of elaboration, and represent a substantial and enduring intellectual achievement. But the theory and practice of merger analysis has moved on considerably since then. Updated Guidelines were badly needed if clear guidance was to be provided about the Commission’s approach to analysing mergers.

Competition policy payments are back in favour, with the Rudd Government, the States and even the Business Council all embracing the idea that States should be paid for undertaking reforms. But even if competition payments were a good idea in the 1990s, do they make sense now? The answer is that they do not.

“What I'm determined to do with the cabinet colleagues is to say well, here are some performance benchmarks in terms of how this is implemented over the next three years. .. we do that and everyone's clear about what's expected of them.”
Kevin Rudd, interviewed on the ABC’s 7-30 Report, 27 November, 2007.

Time only flows one way, but many listeners to Kevin Rudd’s first post-election interview with the ABC’s Kerry O’Brien must have felt a sense of “déjà vu all over again”. Were they in Australia or in early Blairite Britain?