ACCC seeks comment on competition issues with Telstra's Adam acquisition

The Australian Competition and Consumer Commission (ACCC) has released a statement of issues paper seeking industry comment on Telstra’s proposed acquisition of Adam Internet.

The ACCC is seeking further information on potential competition issues due to the merger.

“The ACCC’s preliminary view is that the proposed acquisition is likely to result in a substantial lessening of competition in the supply of retail fixed voice and broadband services,” Rod Sims, ACCC chairman, said in a statement.

“This is because Telstra would have the ability and incentive to use its market power in wholesale markets to favour the Adam Internet business over its other wholesale customers which is likely to foreclose competition in the relevant downstream retail markets.”

Adam Internet is the last independent ISP in South Australia, with Sims concerned around the acquisition reducing competition in the South Australian market, which could impact on services in the state.

Yesterday Vodafone Hutchinson Australia, iiNet and Macquarie Telecom released a joint statement stating they opposed the deal.

“We believe that if the ACCC cannot identify that this acquisition would result in a substantial lessening of competition it is evidence that there is a flaw in the law,” the companies said in the statement.

Submissions for comment close 24 January, 2013.

The ACCC has deferred its decision about whether to give the acquisition the go-ahead to 7 February, 2013.

Follow Stephanie McDonald on Twitter: @stephmcdonald0

Follow Computerworld Australia on Twitter: @ComputerworldAU

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