The Australian Competition and Consumer Commission (ACCC) is concerned that eisa's share -- now 20 per cent -- in Australia's Internet service provider market may negatively affect competition.
Eisa announced on Monday it is acquiring OzEmail in a $300-350 million deal which will see it become the number one ISP in Australia, ahead of Telstra.
The ACCC said the acquisition lifts eisa's market share to 20 per cent in the retail Internet access market.
"The ACCC intends to undertake market inquiries into this proposed acquisition to determine whether it is likely to substantially lessen competition in breach of the merger provisions of the Trade Practices Act 1974," Professor Allan Fels, ACCC's chairman, said.
The ACCC will use information it gathered in its investigation into Telstra's proposed acquisition of OzEmail to determine the impact of the eisa/OzEmail merger, he said.
Telstra's $300 million bid for OzEmail, announced in January, was viewed unfavourably by the ACCC, which stated that the merger would lessen competition.