Vodafone and TPG are taking the ACCC to court over blocked merger

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Image credit: Vodafone

After confirming last year that the Australian Vodafone mobile network and TPG internet service were planning a merger, the consumer watchdog ACCC wasn’t necessarily pleased with the idea.

Now, the ACCC has officially revealed that it will be blocking the $15 billion merger and, in error, has made the news public via a media release that was published while stocks were still trading. 

Naturally, this sent TPG’s share prices plummeting, dropping 13.5 % to $6.07 and lowering the market value of the company by around $1 billion. Talking with the Sydney Morning Herald, ACCC Chairman Rod Sims said the Commission was “embarrassed” and “acutely aware of the impact on the market”.

“Australia already has a very concentrated mobile services market, with the three network operators, Telstra, Optus and Vodafone, having over 87 per cent share,” the updated release from ACCC reads. “Similarly, the fixed broadband market is concentrated, with Telstra, TPG and Optus having approximately 85 per cent share.”

The ACCC would much prefer TPG to instead enter the mobile market as a separate entity, which would theoretically give Telstra, Optus, and Vodafone further rivalry and ensure a more competitive market for consumers.

In response to the opposition, both TPG Telecom and Vodafone Hutchinson Australia will be taking the ACCC to Federal Court, claiming that the merger will not negatively influence competition in the mobile sector, which is one of the primary reasons for the ACCC’s opposition.