In assessing the competitive effects of mergers, both the Australian Competition and Consumer Commission (ACCC) and the New Zealand Commerce Commission (NZCC) have traditionally adopted a fairly narrow lens on merger-specific cost savings, focusing only on marginal (or variable) cost savings. However, recent court decisions in Australia and New Zealand have arguably adopted a broader lens, finding that fixed cost savings can also affect competitive outcomes.

This brief paper by Managing Director James Mellsop and Analyst Kate Eyre describes these different lenses and suggests possible reconciliations and implications.