The ACCC will not stand in the way of a merger between Xenith and QANTM or between IPH and Xenith.
The ACCC announcement about permitting the Xenith and QANTM merger was completely expected as it would have resulted in two competitors of equal size.
However, today ACCC also gave the go-ahead if IPH and Xenith want to merge.
Why is the ACCC so chill about a potential merger that it believes would create an entity with 40% market share for patent filings and be the largest player in the industry by many multiples?
The ACCC releases limited information about its reasoning. In relation to the IPH-Xenith application, it released the following:
“Most customers we consulted did not express concerns,” ACCC Commissioner Roger Featherston said.
“Corporate customers who seek patent services rely on the expertise and infrastructure of large IP firms to handle their work in complex technology areas and to manage their volume of patent filings. The merged IPH-Xenith entity would have a market share of about 40 per cent of total patent filings.”
“We consider that other firms, including subsidiaries of QANTM and several independent firms, would likely provide sufficient competitive constraint on the new entity,” Mr Featherston said.
“Trademark services require less specialist technical expertise than patent services. We believe that other IP firms and commercial law firms provide a competitive constraint because they are a viable alternative.”
“We also have no competition concerns regarding designs services or plant breeder’s rights services,” Mr Featherston said.
Are there some hidden messages here about professional services generally? Perhaps it says something about scale not being a competition killer.
You can envisage that there would be some corporate leaders in the professional services field that could even be offended about the ACCC’s ‘relaxed’ attitude to their corporate empire building.
To speculate one step further, perhaps it is the fact that all of these firms are focused on Asian expansion and the ACCC does not want to impede the success of an Australian-driven venture.