Decision Nº M/04/032 from Competition and Consumer Protection Commission, 2004-10-28

CourtCompetition and Consumer Protection Commission (Ire)
PartiesSchlumberger,IBM
Decision NumberM/04/032
Date28 October 2004
StatusProhibited
Decision Date28 October 2004
23rd November 2004
NEWS RELEASE
The Competition Authority publishes its full determination
on decision to block IBM’s acquisition of Schlumberger
The Competition Authority announced today (23rd November) that it has
published a 64 page determination following its decision to block IBM Ireland
Limited’s (IBM) acquisition of Schlumberger Business Continuity Services
(Ireland) Limited (Schlumberger).
The Competition Authority has concluded that the proposed transaction, if
allowed to proceed, would “substantially lessen competition” and the Authority
has therefore determined that the acquisition “may not be put into effect.”
Both parties are involved in provision of business recovery services.
This decision of The Competition Authority follows almost five months of
economic analysis and market inquiries. The Authority originally received
notification of the proposed acquisition on 20th May 2004 and announced its
determination to carry out a full (Phase 2) investigation of the transaction on
28th July.
The Authority’s conclusions following its investigation are as follows:
(i) The relevant market is the market for the supply of business recovery
hotsite services in the State. The conclusion concerning the competitive
effects of this transaction, however, is not dependent upon the finding
with regard to the definition of the relevant market.
(ii) The merging parties are the two largest providers of business recovery
hotsite services in the State, and compete directly and closely against
each other.
(iii) Neither of the other two providers of business recovery hotsite services
in the State, Synstar and Network Recovery, nor the combination of
both of them, would exert sufficient competitive pressure to discipline
the combined market power of the merging parties.
(iv) There is an identifiable group of customers in respect of whom in-house
provision of business recovery services would not exercise a sufficient
competitive constraint upon the parties’ ability to increase price.
(v) There is an identifiable group of customers in respect of whom general
service IT companies, teaming specialists and aggregators who supply
some aspects of business recovery services would not exercise a
sufficient competitive constraint upon the parties’ ability to increase
price.
Cont./….
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