ACCC scrutinises TPG's iiNet buyout

The Australian Competition and Consumer Commission is seeking comment on the potential impact on competition that TPG's acquisition of iiNet will have.

TPG announced its $1.4 billion takeover bid last month. The acquisition would boost TPG's broadband customer base to more than 1.7 million.

In a request for submissions issued today by the ACCC, the competition watchdog said it is "investigating how the merger will affect competition for the supply of these telecommunications services, having regard to the areas of overlap between the merger parties and the extent of competitive constraints."

The issues the ACCC is interested in include the "the closeness of competition between TPG and iiNet – how similar or different are their services", the impact of the merger on prices and non-price aspects of competition and "whether "Telstra, Optus, M2 and other providers" would constrain TPG from raising prices or reducing service levels.

The announcement of TPG's move has so far drawn mixed reactions in respect to its impact on competition in the broadband market.

Vodafone has argued it is a positive development for competition in the ISP market, while the Greens have called for the ACCC to block the move.

TPG has said iiNet will live on as a premium brand after the merger.

During a briefing after TPG's initial announcement the ISP played down the potential for the acquisition to lessen competition.

"After this transaction there will still be a very strong level of competition within the communications market in Australia," TPG seneral counsel Tony Moffatt said.

"There's some pretty powerful competitors who are operating in this market and so we consider that, notwithstanding [this] transaction competition is alive and well and we're confident to get through the ACCC process."

The ACCC is seeking submissions until 30 April.