The ACCC’s call to deny Telstra and TPG’s regional network deal has been upheld. 

The Australian Competition Tribunal has confirmed the Australian Competition and Consumer Commission's (ACCC) ruling to reject the proposed regional spectrum authorisation arrangements between Telstra Corporation Limited and TPG Telecom Limited.

In December 2022, the ACCC declined to grant authorisation for the spectrum authorisation arrangements. 

The decision to deny authorisation was based on a belief that the proposed arrangements would likely result in a significant reduction of competition and that any potential public benefit would not outweigh the drawbacks.

The Tribunal highlighted the advantages Telstra would gain from the proposed arrangements, which would strengthen its position in the retail and wholesale mobile markets and diminish Optus' motivation to invest in 5G technology. 

As a consequence, competition would be weakened, leading to higher prices and increased profit margins for Telstra.

“This is the first review by the Tribunal of a merger authorisation under a new authorisation regime which came into effect in 2017,” stated ACCC Commissioner Liza Carver. 

“The Tribunal's reasoning will assist the ACCC in considering future applications for authorisation.”

Telstra and TPG had sought a review of the ACCC's decision from the Tribunal in December 2022. 

The Tribunal, using the same ‘authorisation test’ as the ACCC, can affirm, modify, or overturn the ACCC's determination. The review process is restricted to the information available during the ACCC's evaluation.

The Tribunal cannot grant authorisation unless it determines, considering all circumstances, that the conduct would not substantially reduce competition or that any benefits to the public would outweigh the resulting drawbacks. 

Authorisation provides legal protection from antitrust litigation for conduct that might otherwise breach the Competition and Consumer Act, including section 50, which prohibits mergers that significantly diminish competition.