The Commerce Commission has blocked some 22 mergers
since the current law came in effect in 2001. We draw some trends
from the Commission's track record to date, then look in detail
at three recent "no" decisions.
Pointers to the Commission's decision-making
3:2 mergers are a hard sell
The Commission will resist transactions which reduce the number
of market participants from three to two (3:2). Occasionally it
will clear these deals1, but its starting point is that
3:2 mergers are "a priori likely to reduce levels of
rivalry to the detriment of customers".
The Commission frets about tacit collusion particularly in
markets characterised by price and cost transparency, homogenous
products, stable or inelastic demand and barriers to entry. Faced
with those conditions firms can be tempted to share market power
and co-ordinate behaviour and prices short of forming a
cartel.2 The Commission is more likely to clear a 3:2
deal where the market at issue is technology
