INSIGHT

Honeysuckle and nib granted conditional authorisation; and other developments

By Jacqueline Downes
ACCC Consumer law Infrastructure Technology Telecommunications

The latest in competition and consumer law 6 min read

The ACCC authorises Honeysuckle Health and nib Health Funds to form a buying group to collectively negotiate and manage contracts with healthcare providers, on behalf of payers of healthcare services.

Bunnings' proposed acquisition of Beaumont Tiles allowed to proceed. So, too, Microsoft's proposed acquisition of Nuance Inc.

Qantas and Emirates will apply to the ACCC for an extension to their cooperative agreement, seeking reauthorisation from all relevant regulators to continue coordinating pricing, schedules, sales and tourism marketing routes until 2028.

Qube Logistic’s completed acquisition of the Newcastle Agri Terminal to be investigated by ACCC.

ACCC grants authorisation for NSW and ACT universities to collaborate on travel arrangements for the return of internationals students.

Honeysuckle and nib granted conditional authorisation

On 21 September 2021, the ACCC released its final determination granting Honeysuckle Health and nib Health Funds (nib) authorisation to form a buying group to collectively negotiate and manage contracts with healthcare providers, on behalf of payers of healthcare services. The authorisation is conditional on major insurers Medibank, Bupa, HCF and HBF in Western Australia not joining the buying group.

nib is a large Australian health insurer. Honeysuckle Health is an equal joint venture between nib and Cigna Corporation, and is a health services and data science company that provides services to insurers.

The ACCC was satisfied that the proposed buying group is likely to result in a net public benefit by providing greater choice of buying groups, improved access to information for smaller private health insurers and increased competition between these buying groups.

The ACCC was initially concerned about the potential competition impact if the buying group became too large. However, it was satisfied that the condition to exclude major insurers from membership would adequately address these concerns.

The ACCC's authorisation is for five years and its determination is available here.

ACCC paves the way for Bunnings and Beaumont Tiles

The ACCC announced on 30 September 2021 that it will not oppose Bunnings' proposed acquisition of Beaumont Tiles. Bunnings is a national multi-category home improvement and outdoor living retailer. Beaumont Tiles is a national specialist tile retailer and franchise operator.

The ACCC focused on whether Bunnings and Beaumont Tiles were close competitors. It concluded that Bunnings is not a strong competitor in tile sales and was not therefore acquiring a strong rival in the tile retailing market. In the ACCC's view, Beaumont Tiles and other specialist tile retailers compete much more closely with each other than with Bunnings.

The ACCC also considered that there are many alternative manufacturers and suppliers of tiles globally that would compete with Bunnings post-merger.

ACCC Chair Rod Sims said that the transaction will allow Bunnings to compete strongly with specialist tile retailers, and that this 'may pose challenges for some tile retailers, but it is unlikely to lead to a substantial lessening of competition in this market.'

Qantas and Emirates hope reauthorisation will help them soar to new heights post COVID-19

On 4 October 2021, Qantas and Emirates jointly announced they will apply to the ACCC for an extension to their cooperative agreement. The airlines will seek reauthorisation from all relevant regulators to continue coordinating pricing, schedules, sales and tourism marketing routes until 2028. Qantas and Emirates consider that an extended partnership means they will better recover from the pandemic and deliver a strong financial performance. Their current authorisation expires in March 2023.

This announcement was made shortly after the ACCC released its fifth report on Airline Competition in Australia. The ACCC reported that COVID-related movement restrictions have significantly hurt domestic aviation across the country. Numerous airlines were forced to cancel one-in-three flights in July 2021. The report also revealed that routes in and out of Sydney Airport were not in the top 10 busiest routes, despite it normally being Australia's busiest airport.

Concerns were raised about airports seeking to significantly increase aeronautical charges to recover their COVID-19 lost profits, which the ACCC considers would be an example of airports systematically taking advantage of their market power. The ACCC will be closely monitoring airport pricing, including the extent to which the Aeronautical Pricing Principles are being used in negotiations between airports and airlines.

ACCC takes a nuanced look into healthcare transcription software market

On 7 October 2021, the ACCC announced it would not oppose the proposed acquisition of Nuance Inc. (Nuance) by Microsoft Corporation (Microsoft).

Nuance supplies speech recognition and transcription software primarily to the healthcare market, and customer engagement software including digital engagement (such as 'chatbots'), voice engagement (human-like phone calls) and voice biometric verification. Microsoft does not supply healthcare transcription software, but offers customer engagement technology.

In the ACCC's view, the proposed acquisition is unlikely to substantially lessen competition in the markets for the supply of healthcare transcription and customer engagement solutions. Microsoft and Nuance do not directly compete in healthcare transcription software. Nuance is constrained by alternative suppliers and, in the future, from large technology firms expanding into the health sector. Microsoft's customer engagement solutions are aimed at software developers whereas Nuance's products are supplied to businesses. The ACCC considered there is strong existing competition in this space and that there are many alternatives to Nuance. The ACCC also considers that barriers to entry are not high.

In arriving at its conclusion, the ACCC signalled its intention to scrutinise acquisitions by major technology companies due to a pattern of buying out potential competition threats.

ACCC investigates completed acquisition of Newcastle Agri Terminal

On 7 October 2021, the ACCC announced it will investigate Qube Logistic’s (Qube) completed acquisition of the Newcastle Agri Terminal. Qube notified the transaction to the ACCC on 8 September 2021, then completed the transaction on 30 September despite the ACCC's requests for Qube to delay completion.

The ACCC considered it did not have sufficient time or information to assess the competitive impact of the transaction. The ACCC will treat this matter as an enforcement matter and will not publish an indicative timeline for the investigation on its website.

Qube owns and operates grain storage sites at Narromine and Coonamble and supplies rail haulage in NSW. It also owns and operates the Quattro bulk grain terminal in Port Kembla, NSW. Newcastle Agri Terminal is a bulk grain terminal at the Port of Newcastle. The terminal is one of two bulk grain terminals located at the Port of Newcastle servicing export grain from farms and storage in northern NSW.

The ACCC will focus on the impact of the acquisition on the supply chain for bulk grain export through the Port of Newcastle, and Qube's ability and incentive to discriminate against rivals.

Back to school: NSW and ACT universities collaborate for return of international students

On 7 October 2021, the ACCC granted authorisation for NSW and ACT universities to collaborate on travel arrangements for the return of internationals students. A pilot plan by the NSW Government enables some fully vaccinated international students to return to Australia, with the first phase aimed at bringing 500 students back by the end of the year.

This authorisation allows 14 participating NSW and ACT universities to cooperate in implementing a system for returning international students. The participating universities will jointly establish a mechanism to allocate international flight seats to overseas students, in the context of the expected cap on the number of international student arrivals. They can also work together to appoint a travel services provider to source flights and organise travel for returning students.

The authorisation expires in 31 December 2022.