Dr Higgins submitted the error should be considered alongside the ACCC’s failure to consider mortgage brokers, and regulatory changes meant there is more competition across the banking sector, leaving it open for the fourth and ninth largest banks to merge.

“These are changes of technology and consumer awareness and there is no reason to believe this will collapse into consumer or competition inertia,” Dr Higgins said.

While the takeover, announced mid-last year, would improve ANZ’s standing against National Australia Bank, Commonwealth Bank and Westpac, Dr Higgins said it would still remain the fourth largest bank and its “aggregate interest” in the market share would be small.

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Dr Higgins added there are “public benefits” likely to result from the acquisition “through improved performance” of Suncorp’s insurance benefits and “at least some benefit” in funding costs.

The tribunal’s task would now be to determine “whether the decision was the objectively correct or preferable decision”.

During opening submissions, Dr Higgins said ACCC’s “fatal mistake” is in failing to “engage in the symmetries” between the big banks.

She said the commission focused only on a comparison between the major banks and the smaller banks “as a block”, which “misunderstands the relevant comparisons for symmetry”.

“One doesn’t compare conglomerates, one compares individual entities,” Dr Higgins said.

Referring to a report commissioned by the ACCC, which found no evidence of price coordination, Dr Higgins accused the watchdog of adopting a “let and let live” approach to pricing.

“It is not enough that theoretical detriments be speculative,” Dr Higgins said.

“I cannot rule out a meteor strike of this building today but it is extremely unlikely.”

Why did the ACCC refuse the merger?

In August of this year, the ACCC released its final decision on the ANZ/Suncorp acquisition, in which it stated that it had decided not to grant merger authorisation for ANZ to acquire Suncorp Group’s banking arm over concerns over home loan competition and SME lending competition.

ACCC deputy chair Mick Keogh stated: “We are not satisfied that the acquisition is not likely to substantially lessen competition in the supply of home loans nationally, small to medium enterprise banking in Queensland, and agribusiness banking in Queensland.

“These banking markets are critical for many home owners and for Queensland businesses and farmers in particular. Competition being lessened in these markets will lead to customers getting a worse deal.”

The ACCC said that non-major banks, such as Suncorp Bank, are important competitors against the major banks, especially because barriers to new entry at scale into banking are very high.

“Evidence we obtained strongly indicates that the major banks consider the second-tier banks to be a competitive threat,” Mr Keogh said.

“The proposed acquisition of Suncorp Bank by ANZ would further entrench an oligopoly market structure that is concentrated, with the four major banks dominating. It also limits the options for second-tier banks to combine and strengthen in a way that would create a greater competitive threat to the major banks."

He continued: “We are not satisfied that the acquisition is not likely to substantially lessen competition in the supply of home loans to Australian consumers.

“We consider there is an increased likelihood of coordination between the four major banks in the supply of home loans should Suncorp Bank become part of ANZ. Coordinated market outcomes mean competition is muted at best, to the detriment of customers.

“A substantial lessening of competition in home loans would have major flow-on impacts to Australians with a mortgage. More than a third of Australian households have a mortgage, with loans totalling around $2 trillion, illustrating how critical it is that competition in this market is not substantially lessened.

“The proposed acquisition increases the likelihood that the major banks adopt a ‘live and let live’ approach to each other, aimed at maintaining or protecting their existing market shares. This is instead of competing strongly on price, innovation and the quality of their service and products to win customers.

“While there is evidence of increased competition in the home loans market recently, including in the form of cashback offers to consumers, we are not persuaded that this level of competition will continue.

“We note recent commentary by bank chief executives that they are stepping back from aggressive promotions. If this market was truly competitive, we would not expect to see banks publicly flagging plans to reduce the competitiveness of their offerings.”

The ACCC suggested the acquisition of Suncorp Bank would boost ANZ’s market share in home loans to be above NAB and closer to the Commonwealth Bank and Westpac.

As at June 2023, ANZ’s owner-occupied book was $186.5 billion and its investor loan book was $93.6 billion. It was the smallest of the big four banks.

Suncorp, meanwhile, had $36.6 billion in owner-occupied loans and $14.7 billion in investor loans at the end of June 2023.

CBA’s owner-occupied book was $366 billion while its investor book was $180 billion; Westpac had $293 billion in owner-occupied mortgages and $155.9 billion in investor loans; while NAB has $201 billion in owner-occupied loans and $108.8 billion in investor loans.