Attorney General Mayes, FTC File Complaint to Block Merger of Commercial Playground Equipment Companies PlayPower, Burke

PHOENIX—Attorney General Mayes, as part of a bipartisan coalition of 12 attorneys general, and the Federal Trade Commission (FTC) today filed a lawsuit to block PlayPower’s acquisition of BCI Burke (Burke), which are two of the largest makers of commercial outdoor playground equipment.
 
Attorney General Mayes and the coalition’s complaint alleges the potential merger will drive up prices and decrease quality for equipment bought by schools, churches, parks and recreation departments, and other organizations across the country.

“Playgrounds are where Arizona kids learn, play, and grow, and our schools and communities shouldn’t pay inflated prices for them," said Attorney General Mayes. "I’m proud to join the FTC and a bipartisan coalition of attorneys general to protect competition.”

“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.”

Attorney General Mayes and the coalition allege in their complaint that the deal will significantly increase concentration in an already concentrated market and eliminate PlayPower and Burke’s intense rivalry, which benefits playground customers through lower prices, better services, higher quality and increased innovation. The lawsuit further explains this is problematic because playground prices are already quickly rising.
 
Today, 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, according to the complaint. The proposed transaction would add the Burke brand to PlayPower’s existing commercial outdoor playground portfolio, which includes Miracle Recreation Equipment Company, Little Tikes Commercial and Playworld Systems Inc. — brands PlayPower previously acquired.
 
In addition to driving up prices, Mayes and the coalition explain in the complaint the merger will likely lead to less innovation and poorer service and quality by eliminating Burke’s focus on providing innovative, high-quality products and robust service. They allege the proposed acquisition could also have a negative impact on independent sales representatives who sell the companies’ equipment, leading to lower commissions or worse service terms.
 
Joining AG Mayes and the FTC in filing this lawsuit are the attorneys general of California, Colorado, Illinois, Nevada, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Washington and Wisconsin.