The consumer watchdog is worried that Link's purchase of Pillar could push up prices for super fund members by removing the ASX-listed company's only real competitor in superannuation administration.
The Australian Competition and Consumer Commission on Thursday released a statement of issues on Link's interest in Pillar, which is being privatised by the NSW government, in which it says the move could result in poorer service or higher prices for super fund members.
"The ACCC is concerned that the possible acquisition is likely to substantially lessen competition in the supply of superannuation administration services by entrenching Link's dominant position, resulting in lower service levels or higher prices, which will ultimately be passed on to fund members," ACCC chairman Rod Sims said in a statement.
"It would also remove the potential for an alternative owner to further invest in Pillar's offering and make it an even stronger competitor to Link in the future."
The ACCC is examining the barriers to entry or expansion in the sector and is seeking submissions on the proposed acquisition by October 28, with a decision on the matter to follow by December 16.
Link, which listed on the Australian Securities Exchange a year ago, has not submitted a bid for Pillar but in August said it had expressed an interest in the business.
On Thursday, it said it was looking into the ACCC's statement of issues.
"Link Group has a compelling proposition for the State of NSW which would fully address the requirements of the enabling legislation and the sale process," Link said in a statement.
