Companies could be required to notify authorities of planned acquisitions as part of what may be the biggest overhaul to the nation's mergers regime in decades.
As the federal government looks at ways to boost competition and productivity, it has begun consultations on whether current merger rules and processes are "fit for purpose".
In the past decade there have been, on average, 330 mergers a year and the Australian Competition and Consumer Commission and others have raised concerns that increased industry consolidation has reduced competition and harmed consumers.
A consultation paper released jointly by Treasurer Jim Chalmers and Assistant Minister for Competition Andrew Leigh said a range of indicators, including industry concentration and firm mark-ups, "suggest a deterioration in competition in Australia since the early 2000s".
"International evidence suggests current merger rules may be too permissive, allowing some mergers that don't deliver benefits to consumers, workers and the wider economy," the ministers said.
"We want mergers to drive improvements in productivity, to put downward pressure on prices and to deliver more choice."
Increased industry consolidation had coincided with a deterioration in the nation's productivity and reduced dynamism in the economy, the consultation paper said.
Reduced competition also hurts consumers by leading to higher prices, lower quality and less choice while also dragging on wages.
Under current rules, companies can choose whether or not to notify of a merger and there has been an increase in "creeping acquisitions" and the takeover of emerging competitors by established players.
There are also concerns the current regime is biased towards approval of mergers and allows for parties to present distorted or inadequate information.
Among possible changes outlined in the consultation paper are a move to mandatory notification, as is required in the United States and the European Union, the suspension of mergers to allow for assessment by the ACCC and expanding the factors to be considered when assessing proposed mergers and acquisitions.
Submissions on the consultation paper are open until January 19, 2024.