Tatts- Tab­corp deal un­der mi­cro­scope

Townsville Bulletin - - NEWS - TREVOR CHAP­PELL

THE pro­posed $ 11 bil­lion merger be­tween wa­ger­ing gi­ant Tab­corp and lotteries and wa­ger­ing firm Tatts Group is set for more scru­tiny – this time by the Fed­eral Court.

The Aus­tralian Com­pe­ti­tion and Con­sumer Com­mis­sion has ap­plied to the Fed­eral Court for a ju­di­cial re­view of the Aus­tralian Com­pe­ti­tion Tri­bunal’s con­sent for Tab­corp to merge with Tatts.

The ACCC ar­gues that the tri­bunal made three er­rors of law in its de­ci­sion which, the com­pe­ti­tion watch­dog says, are fun­da­men­tal to the case and to all fu­ture merger as­sess­ments.

Tab­corp ini­tially sought in­for­mal merger clear­ance from the ACCC, and the ACCC started a re­view in Novem­ber 2016.

But shortly af­ter the watch­dog pub­lished a state­ment of is­sues in March 2017, Tab­corp with­drew the ap­pli­ca­tion and in­stead lodged an ap­pli­ca­tion for au­tho­ri­sa­tion with the Aus­tralian Com­pe­ti­tion Tri­bunal.

The ACCC and Aus­tralian Com­pe­ti­tion Tri­bunal ap­ply dif­fer­ent tests when as­sess­ing a merger.

The ACCC con­sid­ers if there would be a sub­stan­tial less­en­ing of com­pe­ti­tion. The tri­bunal can au­tho­rise a merger if the public ben­e­fits out­weigh the public detri­ments.

The tri­bunal granted au­tho­ri­sa­tion for the Tatts- Tab­corp merger last month, say­ing that the merger would cre­ate sub­stan­tial public ben­e­fits and no ma­te­rial detri­ment.

“The ACCC is al­leg­ing the tri­bunal made three re­view­able er­rors,” ACCC chair­man Rod Sims said in a state­ment yes­ter­day.

“It ( the ACCC) 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.”

The ACCC is chal­leng­ing the tri­bunal’s rea­son­ing that the pro­posed merger could only be detri­men­tal if there was a sub­stan­tial less­en­ing of com­pe­ti­tion.

The watch­dog said the tri­bunal had in the past con­sid­ered the detri­ment con­sti­tuted by any less­en­ing of com­pe­ti­tion.

Se­condly, the ACCC said that in con­sid­er­ing pos­si­ble detri­ment, the tri­bunal failed to com­pare the likely fu­ture state of com­pe­ti­tion both with and with­out the merger.

Thirdly, the ACCC claims the tri­bunal erred in the weight it gave to ben­e­fits such as cost sav­ings and rev­enue syn­er­gies, which would ben­e­fit Tab­corp but not con­sumers gen­er­ally.

Tab­corp said it was con­sid­er­ing the ACCC’s ap­pli­ca­tion and would pro­vide in­for­ma­tion as ap­pro­pri­ate.

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