Affected market: Construction project information and contact data
No. ME/1049/04
Please note that the full text of the decision can be downloaded from the link on the right. What follows are extracts regarding the parties, the transaction, jurisdiction, assessment and decision.
The OFT's decision on reference under section 22 given on 1 July 2004
PARTIES
Emap plc (Emap) is a media company, active in the sale of magazines, the ownership of local radio stations and the organisation of events and conferences. Through Emap Glenigan, it provides construction sales and marketing services (CSMS) and, more particularly, construction sales and marketing information services (CSMIS), including project information and contact data (PICD) products (a segment of CSMIS).
ABI Building Data Ltd (ABI) also provides CSMS, more specifically CSMIS, including PICD products. Its annual turnover is about £5.1m.
TRANSACTION
Emap acquired ABI on 4 May 2004. The administrative deadline is 1 July 2004. Emap gave initial undertakings under section 71 of the Enterprise Act 2002 (the Act) on 4 June 2004.
JURISDICTION
As a result of this transaction Emap and ABI have ceased to be distinct. The OFT believes that each of Emap and ABI can be considered an 'enterprise' for the purposes of section 23(1) of the Act. The parties overlap in the supply of CSMIS products and the share of supply test in the Act is met in respect of the supply of PICD products. A relevant merger situation has, therefore, been created.
ASSESSMENT
ABI and Emap appear to be each others closest substitutes in the supply of PICD products. On the basis of the information provided, there may not be sufficient rivalry with the remaining existing products to constrain the merged entity from exercising market power and price discriminating to the detriment of some customers post-merger. The possibility of entry/expansion or self-supply does not appear sufficiently certain or viable to offset these concerns. The merged entity may therefore be able to increase prices, reduce service levels or the quality of information provided to these customers from the levels they would have been without the merger. Furthermore, it may have less incentives to innovate that it otherwise would have done absent the merger.
Consequently, the OFT believes that it is or may be the case that the merger has resulted or may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.
UNDERTAKINGS IN LIEU
Undertakings in lieu are intended to remedy, mitigate or prevent the competition concerned identified as a result of merger. While it does not believe that the merger does give rise to a substantial lessening of competition, Emap has offered a two-pronged remedy to address any potential competition concerns that might be considered by the OFT to arise.
This combined remedy would therefore not appear to be sufficient to address the competition concerns identified.
DECISION
This merger will therefore be referred to the Competition Commission under section 22(1) of the Act.
NOTES
1. Paragraph excised at the request of the parties.
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