Australia's top 100 listed companies now account for 47 per cent of the economy, up from 15 per cent two decades ago.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Australian Competition and Consumer Commission chairman Rod Sims will use that fact from new research on Thursday to put the case for a "rebuttable presumption" that large mergers not proceed unless there is evidence to the contrary.
Under the approach, used by US courts, merger parties have to explain why the conventional wisdom that a merged firm will charge more does not apply to them and back up the contention with evidence.
"After all, a company has more facts and knowledge of its company and its industry," he will tell the annual RBB Economics conference.
"There will be times when a merger to high concentration is acceptable, due perhaps to low entry barriers," his speech notes say.
"But logic says it will not be the norm. Why shouldn't those arguing the unconventional have the burden of producing evidence to support their position?
"The conventional wisdom is that mergers resulting in high levels of concentration in markets with substantial barriers to entry will usually reduce competition and cause harm to consumers and our economy."
Small market
On Wednesday Telstra chairman John Mullen said the Australian business landscape had oligopolistic "characteristics" partly because of the size of the market and the population, particularly where there was a requirement for heavy investment.
"If you have two players usually the returns are on the high side and attract the attention of regulators. As soon as we get to three, someone will die. The economics are just not there," he told the Australian Financial Review's Chanticleer lunch in Melbourne.
Dr Sims will say that comparable research in the US finds that in the past two decades the gross revenue of the Fortune 100 companies has climbed more slowly from 33 per cent of GDP in 1994 to 46 per cent.
The Australian research, conducted by Port Jackson Partners, finds that while only 29 per cent of the companies that were in the ASX 100 in 1990 were still there by 2015, each of the six largest companies remained at the top. They were Telstra, BHP and four big banks.
