The ACCC has put the country’s two biggest outdoor media businesses oOh! and APN on notice that it has serious concerns with their proposed merger.
The competition watchdog is focusing on the greater than 50 per cent market share the merged companies would achieve, and the loss of competition as a result.
The ACCC is currently working through the proposal, and says interested parties should provide submissions by May 19, and intends to announce its final view on July 6.
The merged $1.6bn firm, it says, would be the only out-of-home (OOH) provider with a presence in all categories of OOH advertising. Other OOH providers have significantly smaller market shares, and tend to focus on particular categories of outdoor advertising.
Rod Sims, chairman, ACCC says, “Many industry participants have competition concerns in relation to the merger. It will combine the two largest providers of out-of-home advertising in Australia, creating a market leader with more than 50 per cent of all out-of-home advertising, and an even higher share in some segments, such as roadside billboards.
“The ACCC’s preliminary view is that the merger is likely to substantially lessen competition in the out-of-home advertising market. The loss of competition could result in increased prices for advertisers, or lower levels of service, quality, or innovation.
Significantly, the merged duo will be able to bundle billboards with other formats to price its competition out of the market, says Sims.
“Industry participants have also raised concerns that the combined APN Outdoor/oOh!media will be able to squeeze competitors out of the market, by bundling billboards, where it has a dominant position, with other forms of out-of-home advertising.
Sims says that site owners will not be able to get APN and oOh! to compete to drive up rent costs.
“The ACCC is concerned the merger may damage the interests of site owners, who rely on competition between APN Outdoor and oOh!media to obtain the maximum rent for their sites.
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