WPP Group plc - proposed acquisition of The Communications Group Holdings Limited

Summary

WPP Group plc - proposed acquisition of The Communications Group Holdings Limited.

Market definition

For the purposes of the analysis of this acquisition, the relevant markets are:
1. The national market for marketing communications services including advertising agency and related services; and
2. The national market for media buying services.

Competition analysis

The Commission decided that the proposed acquisition is unlikely to result in a substantial lessening of competition in the relevant markets, pursuant to section 50 of the Trade Practices Act 1974, for the following reasons:
1. Market concentration levels will not exceed the ACCC's thresholds in either market;
2. Barriers to entry to the markets appear to be low in both markets;
3. Both markets are characterised by strong competition between agencies. The information available to the Commission indicated that, at least currently, agencies operating within the same corporate group compete strongly with each other.
Overall, the merged entity is likely to be constrained from raising prices beyond competitive levels in either market by the potential for clients to switch to one of several alternative suppliers.

Merger type

Horizontal

Initiation

Parties