Iron Mountain Incorporated - s.87B undertaking

Company or individual details

  • Iron Mountain Incorporated

Undertaking

On 31 March 2016, the ACCC announced it had accepted an undertaking (the Undertaking) from Iron Mountain Incorporated (Iron Mountain) in relation to its proposed acquisition of Recall Holdings Limited (Recall) (the Proposed Acquisition).

The Undertaking requires that Iron Mountain divest its physical document management services (PDMS) and digital document management services (DDMS) in Australia (Divestiture Business) to an ACCC-approved purchaser. Excluded from the Divestiture Business is Iron Mountain’s PDMS and DDMS businesses in the Northern Territory that services customers whose holdings are exclusively in the Northern Territory.

The ACCC considered that in the absence of the Undertaking, the Proposed Acquisition:

  1. would have had the effect or have been likely to have the effect of substantially lessening competition in a national market for the supply of PDMS; and
  2. may have the effect of substantially lessening of competition in regional markets, centred on each State and Territory capital city excluding the Northern Territory, for the supply of PDMS.

The ACCC was concerned that the Proposed Acquisition would eliminate close competition between Recall and Iron Mountain for the supply of PDMS. The ACCC considered that there are a limited number of suppliers that compete for PDMS customers with national or multi-regional needs. The ACCC was particularly concerned that Iron Mountain and Recall were the two most significant suppliers to, and each other’s closest competitors for, these customers. National and multi-regional PDMS customers account for a substantial proportion of total Australian PDMS by value. The ACCC was also concerned that the Proposed Acquisition would have led to a substantial increase in concentration in each regional market (other than the Northern Territory).

The objective of this Undertaking is to address the ACCC’s competition concerns that would otherwise arise as a consequence of the Proposed Acquisition. The Undertaking aims to achieve this objective by placing obligations on Iron Mountain to:

  1. ensure that the Divestiture Business is sold to an ACCC-approved purchaser;
  2. create or strengthen a viable, effective, stand-alone, independent and long‑term competitor in the markets for the supply of PDMS in Australia;
  3. ensure the purchaser of the Divestiture Business has all the necessary associated assets and rights to compete effectively with Iron Mountain in the markets for the supply of PDMS in Australia;
  4. maintain the economic viability, marketability, competitiveness and goodwill of the Divestiture Business prior to divestiture; and
  5. provide for the effective oversight of IRM’s compliance with this Undertaking.