Illinois Attorney General Kwame Raoul has joined the Federal Trade Commission and 11 other state attorneys general in a lawsuit to block the merger of two of the largest makers of commercial outdoor playground equipment, his office announced Monday.
The complaint, filed Oct. 19, seeks to stop PlayPower's acquisition of BCI Burke. Raoul's office said the deal would drive up prices and decrease innovation and quality for playground equipment bought by schools, churches, parks and recreation departments and other organizations across the country.
The coalition alleges the merger would significantly increase concentration in an already concentrated market and eliminate the companies' rivalry, which it says benefits customers through lower prices, better service, higher quality and increased innovation. The complaint says playground prices are already rising quickly.
According to the complaint, five companies — including PlayPower and Burke — own more than a dozen playground equipment brands and hold 85% to 90% market share in the United States. The proposed transaction would add the Burke brand to PlayPower's existing portfolio, which includes Miracle Recreation Equipment Company, Little Tikes Commercial and Playworld Systems Inc.
The coalition also alleges the merger would likely lead to less innovation and poorer service and quality by eliminating Burke's focus on high-quality products and robust service. It says the deal could harm independent sales representatives who sell the companies' equipment, leading to lower commissions or worse service terms.
"I am proud to join the FTC and my colleagues in moving to stop this illegal merger between two of the country's largest playground manufactures, which would significantly raise prices for Illinois schools and park districts in an already over-priced market," Raoul said. "I am committed to pushing for lower prices and preserving competition, regardless of the industry, which is why I will continue to push back on illegal mergers."
"Playgrounds are an indispensable part of daily life for millions of American kids and their families. And state and local governments spend hundreds of millions of taxpayer dollars each year on playgrounds so that their communities have places for kids to play safely," said Daniel Guarnera, director of the FTC's Bureau of Competition. "Instead of investing in building better playgrounds or lowering prices, PlayPower and its parent Platinum Equity want to eliminate one of PlayPower's fiercest competitors and continue to raise prices on American schools, parks departments, churches and municipalities."
Joining Raoul and the FTC in filing the lawsuit are the attorneys general of Arizona, California, Colorado, Nevada, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Washington and Wisconsin.