Conditional approvals were, in the original design of the Competition Act, an exceptional tool. The standard form of merger analysis was binary: a merger either substantially prevented or lessened competition, or it did not, and the corresponding outcome was prohibition or unconditional approval. Conditions were available where they could remedy a specific competition concern, and where the remedy was proportionate to the concern.
The position has shifted. Conditional approvals are now the standard form of outcome in significant mergers. The conditions themselves have become more varied: employment commitments, undertakings concerning the localisation of supply chains, investments in particular regions, divestment of unrelated assets, and contributions to industrial development funds. Many of these conditions are difficult to characterise as proportionate remedies to identified competition concerns.
There are good reasons for the shift. The Act was amended to give explicit weight to public-interest considerations, and the constitutional framework permits, indeed requires, attention to questions of inequality and economic transformation. The Tribunal has done careful work in adapting its analytical framework to accommodate these considerations.
But the cumulative effect is an architecture under strain. The merger control regime is being asked to deliver outcomes that other instruments of industrial and economic policy are better designed to deliver. The institutional risk is that competition analysis becomes secondary to negotiation over conditions, and that the predictability of merger outcomes — which has economic value in itself — is eroded. A more deliberate division of labour between competition policy and industrial policy is, in the longer view, the question that needs to be addressed.