“Companies acquiring strategic or potentially controlling stakes in a competitor will continue to attract ACCC scrutiny.”
Those were the words of Commissioner Stephen Ridgeway when the Australian Competition & Consumer Commission (ACCC) launched its probe into Innovation Holdings Australia’s (IHA) supposed plan to increase its existing shareholding in iSelect Limited to around 35%.
IHA – which the competition watchdog described as the owner, by way of IHA’s related bodies corporate, of insurance comparison website comparethemarket.com.au – currently has a 29% stake in Compare the Market rival iSelect.
“We are considering whether the completed and proposed acquisitions are likely to substantially lessen competition,” said Ridgeway.
“iSelect is a competitor to Innovation Holdings in offering comparison services for a range of financial and energy products to consumers and minority stakes held between competitors can give rise to competition concerns.”
When contacted for comment, a Compare the Market spokesperson told Insurance Business: “The ACCC wants to understand the Australian comparison market. That’s the background of their inquiries. We pride ourselves in being transparent in everything we do and we encourage all to do the same.”
The company representative went on to clarify that Compare the Market in Australia is not owned by IHA but by Financial Holdings Australia, which has shareholders in common with the firm in question.
“Our sister company has been buying shares in iSelect since 2018,” noted the spokesperson. “They, like us, believe comparing the widest range of goods and services is the best way to help consumers save money. That’s why we are so keen to have more products on our site.
“Beyond that, we’re not privy to Innovation Holdings Australia’s thinking.”
Meanwhile, iSelect has issued its own clarification in response to the ACCC investigation. In a regulatory filing, it highlighted that IHA had withdrawn from previous discussions and that there are no ongoing negotiations for a potential share deal.
