What: By the close of Thursday's trading session on the ASX the share prices of Medibank Private Ltd (ASX: MPL) and Primary Health Care Limited (ASX: PRY) had plunged 5.5% and 3.1% respectively.
So What: The catalysts for the falls – which compare to a flat day for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) – were two separate announcements by the Australian Competition and Consumer Commission (ACCC).
The first, stated that the ACCC had taken action against Medibank for alleged misleading and unconscionable conduct.
The second announcement stated that the ACCC had acted to restore competition for pathology services in Queensland.
What now: According to the release in relation to Medibank, the ACCC has alleged that Medibank contravened the Australian Consumer Law in its alleged failure to notify Medibank members regarding its decision to limit benefits paid to members for in-hospital pathology and radiology services.
The ACCC is seeking declarations, injunctions, compensation orders, pecuniary penalties, findings of fact, implementation of a trade practices compliance program, corrective notices and costs.
Meanwhile, the release regarding pathology services in Queensland has ramifications for Primary Health Care with the medical centre operator accepting a court enforceable divesture undertaking relating to the acquisition of Healthscope Ltd (ASX: HSO) pathology assets in Queensland in 2015.
For investors and shareholders alike, the actions by the ACCC regarding Primary appear unlikely to have a dramatic effect on the valuation of the company.
In contrast, the ACCC's actions against Medibank could be significant, developments here should be watched closely.
