OFT decides not to refer travel brochure distributors merger

18 Nov 2008

The OFT has decided not to refer the anticipated acquisition of Ocean Park Limited by Orbital Marketing Services Group Limited to the Competition Commission. The OFT found that it would be under a duty to refer the merger as it would combine the only two bulk distributors of tour operators travel brochures to travel agencies and other retail outlets in Great Britain. However, given the size of the market and the limited impact of the merger, the OFT exercised its de-minimis discretion, deciding that a detailed investigation by the Competition Commission would be disproportionate to the competition concerns.

To date the de-minimis exception to the duty to refer has only been applied in a limited number of cases mostly arising in the transport sector. In the one case to date not in the transport sector in which the exception was applied, the turnover in the affected market was very low (less than £1 million). The case shows that larger markets below the £10 million threshold may benefit from the exception depending on the circumstances. Although a “2 to 1” merger would normally justify a reference even for fairly small markets, the OFT was prepared to accept the arguments of the parties regarding the lessened impact of the merger in the future due to the expected decline in size of the market.

Ben Rayment advised Orbital Marketing Services Group Limited as to the applicability of the “de minimis” exception.

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Ben Rayment