The Australian Competition and Consumer Commission today issued a Statement of Issues on the proposed acquisition by Video Ezy Australasia Pty Ltd of Blockbuster Australia Pty Ltd and the master franchise rights for the business. Both Video Ezy and Blockbuster are owners and franchisors of stores in Australia that primarily rent and retail DVDs and games to consumers.
The statement invites further information and comment on the wholesale purchase of new release DVDs and the rental supply of DVDs to consumers. In particular, the ACCC invites comment on:
- whether the combined purchasing power of Video Ezy and Blockbuster would enable the merged entity to gain exclusive deals or other arrangements from DVD distributors that may raise the costs of other video rental outlets or otherwise undermine the ability of those other outlets to compete with the merged entity, and
- whether, despite the relevant franchisees remaining distinct and independent small business operators, the merger would facilitate tacit cooperation or otherwise undermine competition between independent Video Ezy and Blockbuster outlets, particularly where those outlets are the main video rental suppliers in a local market.
"The ACCC is seeking further information on its competition concerns regarding the wholesale purchase and rental supply of DVDs before making a final decision," ACCC Chairman, Mr Graeme Samuel, said today.
The ACCC invites further submissions from Video Ezy, its suppliers, competitors and customers as well as other interested parties that focus on the topics outlined in the Statement of Issues by Wednesday 23 May 2007. The ACCC expects that, once it has considered any further submissions, it will make a final decision on the proposed acquisition on 6 June 2007.
The Statement of Issues will be available on the ACCC's website, www.accc.gov.au, under Mergers.