Eisa's $300 million acquisition of OzEmail is not expected to lessen competition in the ISP market, according to the Australian Competition and Consumer Commission.
The ACCC said yesterday it would not intervene in the proposed acquisition.
"Following market inquiries with other internet service providers and on the basis of other information, the ACCC has concluded that the proposed acquisition is unlikely to substantially lessen competition," said Allan Asher, acting ACCC chairman.
Asher said Eisa's new 20 per cent market share would "not significantly alter the existing market structure.
"Following the acquisition, there will be two large ISPs in terms of active subscriber numbers, Telstra and Eisa/OzEmail, followed by a number of smaller competitors. Under these conditions, the competitive dynamics of this industry would be largely unaffected," he said.
Evidence of strong competition dynamics is already apparent, Asher said, with Telstra's recent decision to reduce it's internet access prices.
Meanwhile, Eisa is yet to detail its funding arrangements for the purchase. It is understood the company is considered a number of options including strategic investors.