The Australian Competition and Consumer Commission is asking for a new review of the planned Tabcorp-Tatts merger.
The commission has asked the country’s federal court for a justice review of the Australian Competition Tribunal’s approval of the merger. The merger is expected to create a company valued at 11 billion Australian dollars. The companies had hoped to complete the merger in coming weeks.
The tribunal approved the merger despite opposition from the commission, as well as rival bookmakers, over competition fears in the country.
Commission chairman Rod Sims said in a press statement that “the ACCC is alleging the tribunal made three reviewable errors. It is therefore seeking clarification of these three points of law, which are central to the tribunal’s assessment of Tabcorp’s proposed acquisition of Tatts.”
One error concerns the way the tribunal only recognized a “public detriment” if it observed a “substantial” lessening of competition. The commission argued that any lessening of competition, whether substantial or not, should be taken into account.
The commission is also seeking a review of the tribunal’s failure to compare the future state of competition both with and without the proposed merger. The commission maintains that the “future with and without” comparison is fundamental to the assessment of likely detriment in all competition cases.
Lastly, the commission is seeking a review on the grounds that tribunal made an error in the weight it gave to benefits, such as cost savings and revenue synergies, which would be retained by Tabcorp and not shared with consumers more broadly.
“We believe we had no option but to seek a review of these three, what we say, are reviewable errors, particularly because they set such important precedents for the decisions we have to make into the future,” Simms said.
The companies said they will challenge this new appeal and seek to have it fast-tracked in court.
“The ACCC’s application will impact the timing and implementation of the transaction, though the precise impact will not be known until the court has considered the matter,” Tabcorp said in a press statement. “Tabcorp considers that implementation remains achievable in the last quarter of 2017.”
