A Costly Climb for California Schools and Parks: Attorney General Bonta Sues to Block Merger of Outdoor Playground Manufacturers PlayPower and Burke
OAKLAND — California Attorney General Rob Bonta, as part of a bipartisan coalition of 12 states and the Federal Trade Commission (FTC), today filed a lawsuit challenging the proposed merger of PlayPower, Inc. (PlayPower) and BCI Burke Company, LLC (Burke). PlayPower and Burke, both owned by private equity firms based in California, are two of the top five largest national suppliers of commercial outdoor playground equipment. In the lawsuit, the FTC and attorneys general allege that the proposed merger of PlayPower and Burke is illegal, would result in less competition in the market of outdoor playground equipment both nationwide and in California, and could lead to higher prices and lower quality. Prices for commercial outdoor playground equipment have already seen a recent stark increase amid a history of consolidation within this market.
“Millions of American children look forward to having some fun by visiting their local playgrounds. The illegal merger of PlayPower and Burke, two of the largest manufacturers of commercial outdoor playground equipment, threatens to lower quality and increase prices for California schools and local parks and recreation departments that provide access to this experience for kids. We’re not letting this one slide,” said Attorney General Bonta. “As the People’s Attorney, I am proud to join the Federal Trade Commission and a bipartisan coalition of attorneys general in challenging this unlawful merger in a market that has already seen prices swing high. Let me be clear: The only kind of monkey business we want to see here is on competitively priced monkey bars.”
The market for commercial outdoor playground equipment is already highly concentrated, with five main competitors accounting for approximately 85% to 90% of the sales in the U.S. This proposed merger of PlayPower and Burke would join two of the top five largest suppliers. With less competition, businesses face less pressure to keep prices competitive and can charge higher prices without improving the quality of goods and without the risk of losing customers to competitors. Purchases of outdoor commercial playground equipment are mostly funded through government and taxpayer dollars, largely by schools and parks and recreation departments, meaning most of the cost of price increases, including those due to reduced competition, falls squarely on the public. In the lawsuit today, filed in the U.S. District Court for the Northern District of California, the coalition alleges that if PlayPower and Burke are allowed to merge, the merger will substantially lessen competition in market for commercial outdoor playground equipment, in violation of Section 7 of the federal Clayton Act.
In filing today’s lawsuit, Attorney General Bonta joins the FTC and the attorneys general of Arizona, Colorado, Illinois, Nevada, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Washington, and Wisconsin.
As many California families are experiencing the burden of the affordability crisis, Attorney General Bonta remains committed to going after anticompetitive behavior driving up costs. In the entertainment and media industries, Attorney General Bonta recently announced a settlement with Paramount in the Warner Bros./Paramount litigation that protects the livelihoods of Hollywood workers and guarantees massive investments in domestic film production and secured a victory in the ongoing Nexstar/Tegna litigation. This past year, he also tackled other anticompetitive conduct by securing an end to Agri Stats’ price coordination scheme that drove meat prices up for consumers, exposed Amazon’s illegal price fixing scheme, and secured a settlement that delivered 8.9 million eggs to California food banks. Visit our website to take a look at the full scope of our antitrust program.
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