The Australian Competition and Consumer Commission is seeking industry feedback on whether the proposed acquisition of iiNet by TPG would lessen competition in supplying retail fixed broadband services.
It released a Statement of Issues outlining its preliminary views on the proposed acquisition, stating that it is unlikely to raise competition concerns in other markets, including in relation to the supply of wholesale transmission (or backhaul), mobile broadband and voice services.
As a result, the ACCC will defer its final decision until August 20.
“The proposed acquisition would combine two of the five largest suppliers of fixed broadband in Australia. The ACCC is exploring the extent to which the acquisition of iiNet will reduce competition by reducing the likely competitive tensions in respect of pricing, innovation and service quality,” ACCC Chairman, Rod Sims, said in a statement.
“The ACCC has received a number of submissions from consumers. Their concerns primarily focus upon fears that iiNet’s customer service levels will decline as a result of the proposed acquisition.”
Sims said the ACCC was also considering whether the competitive constraint posed by the remaining competitors, such as Telstra, Optus, M2 and other smaller market participants, would be sufficient to prevent a substantial lessening of competition in the supply of fixed broadband services.
“As a general proposition, competition is stronger when the market contains more competitors,” Sims said.
The ACCC invites further submissions from interested parties in response to the Statement of Issues by July 2.
In May, the iiNet Board backed TPG’s revised offer after receiving a rival bid from M2 Group.
TPG flagged its intentions to purchase the Perth-based ISP in March for $1.4 billion. M2 Group followed with a counter-bid in April with a $1.6 billion share swap offer.