MIL OSI – Source: Commerce Commission – Commission closes investigation into Wilson Parking’s acquisition of Tournament
Commission closes investigation into Wilson Parking’s acquisition of Tournament
24 March 2015
The Commerce Commission is taking no further action in its investigation into Wilson Parking New Zealand Limited’s acquisition of rival Tournament Parking Limited’s parking assets.
The Commission’s investigation focused on areas in city centres where the loss of Tournament following the acquisition in July 2013 reduced the competition Wilson faced. The most acute of these were Auckland’s Parnell Rise and Symonds Street areas.
The Commission’s view was that the acquisition removed a competitive constraint. However, customer survey results suggested public transport may be enough to curb daily and monthly car parking prices in both locations. When asked how they would respond to a five per cent price increase, enough consumers said they would switch to the bus to make this price increase unlikely.
Commerce Commission Chairman Dr Mark Berry said the case highlighted the complexities involved when investigating narrow markets.
“The intent of customers to switch to public transport if car park prices rise is inconsistent with comments from industry participants, and it isn’t our view that public transport will always curb car parking prices. However, we did not uncover strong evidence to contradict the survey results in these specific areas, where public transport is well-used and convenient.
“In our view, the evidence does not support a conclusion that Wilson Parking’s purchase of Tournament substantially lessened competition in the areas where we had concerns,” Dr Berry said.
In other areas where Wilson and Tournament competed, including Hamilton, Wellington and Christchurch, the Commission concluded there was enough existing competition from other operators in those markets.
“This investigation has been lengthy, as it was important we were thorough and took the time to gather evidence and undertake the economic analysis we needed to make the right decision. While court action ultimately can’t be justified in this case, we take potential breaches of the Commerce Act seriously. If there’s a chance a merger could substantially lessen competition in a market, businesses should seek a clearance from us for the acquisition to proceed rather than risk an investigation after the fact,” Dr Berry said.
A copy of the full investigation report outlining this decision can be found on the investigation reports page.
Mergers that substantially lessen competition in a market are prohibited under section 47 of the Commerce Act 1986.
If a business is concerned that its proposed merger with a competitor might be viewed as anti-competitive, it can seek prior approval from the Commission for the merger to proceeds. This is known as a clearance.
The clearance regime is voluntary. However, if the Commission becomes aware of a merger that does not have clearance approval and that may be likely to substantially lessen competition in a market, it may investigate the merger. If the Commission concludes that the merger has, or likely has, resulted in a substantial lessening of competition in a market, the Commission can take enforcement action under the Commerce Act 1986. This can result in significant penalties and the court may order the merger to be reversed.–]]>