A key telecoms merger in Australia has been given the green light by the Australian Competition Tribunal, but with very tight new conditions aimed at guaranteeing customer privacy. The ruling, delivered last week, also obliges the involved companies to conduct independent privacy audits and restrict the extent to which customer data can be shared for at least 5 years following the deal.
The tribunal emphasised that the merger should not jeopardise personal data security through any competitive advantages arising from the merger, in accordance with the current Privacy Act in Australia. The merging parties will now be required to have an external reviewer to check on compliance and report to the regulators.
The Implications of this for Future Deals
According to legal professionals, the decision sends a strong message to the sector that data protection cannot be a secondary consideration in large corporate deals. It is anticipated that companies that intend to undergo similar consolidations will establish more robust privacy structures from the outset to prevent last-minute challenges.
Telecommunications groups were pleased with the approval but said the additional compliance costs would delay some infrastructure upgrades. The consumer advocates, however, cheered the move as a viable step to ensure that personal information is safe in an ever-connected market.
As digital services continue to proliferate in Australia, this is a result of increased attention from competition regulators to privacy risks in the telecom industry. Analysts believe this will be the case in future reviews of mergers across the region to balance business growth and consumer protection.