The CMA are investigating a merger between children toy suppliers VTech and LeapFrog

Children’s toys and tech are expensive enough. Parents don’t need any reminders that the cost some of the latest toys and gadgets can attract, especially in peak times around Christmas.

So, although any merger situation is likely to be investigated by the CMA, to ensure competition is never adversely affected, it could be even more appropriate when it comes to pricey toys.

The CMA are looking in to the completed acquisition by VTech Holdings Limited of LeapFrog Enterprises Inc. in this case.

The CMA will investigate merger situations to ensure that competition is not adversely affected. Competition could be reduced when companies who were competing against each other then become the same company.

More competitors – especially big ones – can allow for consumers to benefit from innovation and better pricing, driven through healthy competition where businesses must make every effort to keep costs down and maximise profit margins without having to simply put prices up. In this case, the CMA’s concerns are surrounding the supply of toddler electronic learning toys, child laptops, child tablets, and child electronic reading systems in the UK.

Both VTech and LeapFrog supply such toys and gadgets, meaning their merger could seriously lessen competition in the market. VTech and LeapFrog are fairly big players in the market.

CMA action

The CMA requested that the businesses respond to proposals to address their concerns, but these remain unanswered. If they continue to not deal with the CMA’s concerns, the CMA could take action against them. Any merger situation that could lead to a lessening of competition in the market may not be seen as acceptable.