In September this year, the Competition Markets Authority (CMA) served an Initial Enforcement Order (IEO) on Stirling Group and SSCP Spring Topco for an allegation that they acted anti-competitively in their recent acquisition.<\/p>\n
Earlier this year, Acorn Care 1 Ltd was acquired by SSCP Spring. Acorn is a reputable care service provider who offers special needs education, residential and foster care, for children and young adults with complex needs.<\/p>\n
But the acquisition may be in breach of the rules!
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The competition watchdogs, in serving the order, raised its concerns for suspecting that the acquisition of Acorn Care has created a situation that is expected to decrease competition in the market, contrary to section 22 of the Enterprise Act.<\/p>\n
The order doesn’t force the companies to reverse its acquisition, but they may be prohibited from taking any action that may fall under section 22 of the Act (in essence, doing something that will lessen competition). If they wish to do so, they may have to gain written consent from the CMA. If the CMA finds that they’ve been acting anti-competitively, they can impose financial penalties and sanctions.<\/p>\n
An order of this kind is quite restricting, and can ensure compliance from the companies. The Stirling Group and SSCP Spring must keep the CMA actively informed of any developments relating to the Acorn business or the Stirling Group business. This includes information about customer volumes and whether there has been any substantial changes in customer demands, as well as any variation in Acorn or Stirling Group’s relationship with suppliers. <\/p>\n
It’s almost like they’re under a Big Brother style surveillance…<\/p>\n