The ACCC has made the right decision in opposing a NAB takeover of Axa. The ACCC’s opposition is well founded on legal grounds and puts the NAB on notice that the ACCC is prepared to go to court to stop it from buying Axa.
It’s clear that the ACCC is saying to the 4 major banks that enough is enough and that from now on the ACCC won’t hesitate to stop them from acquiring innovative competitors such as Axa.
With the ACCC’s failure to stop previous acquisitions by the 4 major banks costing consumers dearly through significantly reduced competition and higher interest rates for borrowers, the ACCC is now seeking to prevent further harm. While the ACCC certainly needs to do much more to resuscitate competition in the banking sector, it’s decision today to oppose NAB’s proposed takeover of Axa is an important first step in the right direction.
Given the stranglehold that the 4 major banks have on the banking sector it’s critical that we see the emergence of strong new players to take on the majors. A tie-up between AMP and Axa could lead to a fifth force to go head to head with the 4 majors.
Axa is a strong and innovative independent competitor and it’s new retail investment platform would allow it to inject new competition into the fast growing market for financial products. With NAB already being a key player in the provision of retail investment platforms for financial advisers and investors it’s essential that NAB is not allowed to stifle competition in that market by trying to take out a new vibrant competitor such as Axa.
A NAB takeover of Axa would be bad news for consumers and the ACCC is correct to oppose it.
Author: Associate Professor Frank Zumbo Competition and Consumer Law Expert University of New South Wales.
