H&R Block Acquisition Blocked Citing Competition Concerns

This week, a federal judge approved a permanent injunction blocking H&R Block’s attempt to acquire 2SS Holdings. The merger would have combined the second biggest player in the “do-it-yourself” tax preparation software market, H&R Block, with the third biggest player, 2SS Holdings, maker of TaxACT software. The Department of Justice (DOJ) filed for the injunction in May, arguing that allowing the combination of the two companies would undermine competition within the market. The ruling could be seen as a major blow to the AT&T and T-Mobile USA merger, which the DOJ is also challenging on similar grounds. That case is scheduled to go to trial in February.
New York Times: Judge Scuttles H&R Block Deal (1 November 2011)
(Source: New York Times)

Construction Companies Guilty of Price Fixing
Asia Pacific

The Australian Competition and Consumer Commission (ACCC) has announced that the Australian Federal Court has imposed AU$1.3 million worth of penalties against three Queensland-based construction companies, JM Kelly (Project Builders) Pty Ltd, TF Woollam & Son Pty Ltd and Carmichael Builders Pty Ltd for engaging in illegal price controlling conduct known in the construction industry as cover pricing.
ACCC’s media release (2 November 2011)
(Source: ACCC)

Wireless Carriers in Antitrust Dispute

Reuters reports that the US District Court has allowed wireless providers Sprint Nextel Corporation (Sprint) and C Spire Wireless to join a Department of Justice (DOJ) antitrust lawsuit against multinational telecommunications corporation AT&T Inc’s (AT&T) proposed US$39 billion acquisition of T-Mobile USA. According to Bloomberg, the DOJ alleges that AT&T’s acquisition of the German-based holding company for Deutsche Telekom will substantially weaken competition in the mobile wireless industry. AT&T has reportedly requested Sprint documents relating to planned competition in order to refute the allegations.
Reuters: Judge allows Sprint suit against AT&T/T-Mobile deal (2 November 2011)
Bloomberg: AT&T Seeks Sprint Plans for Competing After Court Rules on T-Mobile Deal (3 November 2011)
(Source: Reuters; Bloomberg)

Commission Approves EU Property Management Merger
Europe, Middle East and Africa

The European Commission has approved a joint venture between German commercial property manager ECE and Metro Asset Management Services (MAMS), a subsidiary of the German Metro Group, for the provision of retail property management services. The Commission concluded that the transaction would not significantly reduce competition in the European economic area because “the joint venture would continue to face sufficient competition from other providers of retail property management services”.
European Commission’s media release (26 October 2011)
(Source: European Commission)

OFT Refers Audit Services Market Investigation

The UK Office of Fair Trading (OFT) has announced that it has referred an investigation of the market for the supply of statutory audit services to large companies to the UK Competition Commission (CC). The OFT has called for the investigation after a public consultation which raised concerns that the audit market is highly concentrated, has low levels of switching and has substantial barriers to entry. According to the OFT, 99% of the audit fees paid by the Financial Times and Stock Exchange 100 index companies were received by the four largest firms in the audit industry, PwC, KPMG, Deloitte and Ernst & Young.
OFT’s media release (21 October 2011)

The CC has announced that it will now “carry out its own comprehensive investigation, to see if there are any features of this market which prevent, restrict or distort competition and, if so, what action might be taken to remedy them”. The CC is due to report to the OFT by 20 October 2013.
CC’s media release (21 October 2011)
(Source: OFT; CC)