Proceedings filed against government software provider
The NZ Commerce Commission has now filed proceedings against digital government software company Objective Corporation Limited (Objective).
The content management and information systems provider had previously been under investigation by the ComCom for concerns over its acquisition of Feilding-based Master Business Systems.
In 2020, the ComCom initially said that it would probe whether the acquisition had hurt competition between the two companies, which resulted in increased prices and lower quality of products and services supplied by the two.
The proceedings were filed under the umbrella of breaching the Commerce Act 1986, contravening section 47 which prohibits mergers that are likely to substantially lessen competition.
The ComCom has alleged that Objective’s acquisition of Master Business Systems Limited (MBS) in 2019 substantially lessened competition in the New Zealand market for the supply of software to building consent authorities for the digitisation of building consent processes.
Currently, the matter is still before the courts, but both the ComCom and Objective have agreed on a settlement to resolve the proceedings. A penalty hearing in the Wellington High Court is soon to be scheduled.
The company could face penalties of up to NZD$500,000 for an individual or $5 million for a company.
Objective is currently supplying thousands of governments and agencies around the world with solutions for streamlining daily processes.
At the time of the investigation, Objective chief executive Tony Walls said that “Objective has been pro-actively assisting NZCC with their enquiries over recent months and will continue to engage constructively with NZCC to address the concerns which have been raised.”
Master Business Systems Limited was a company incorporated in New Zealand until it was amalgamated into Objective Corporation Solutions NZ Limited, which is a wholly-owned subsidiary of Objective Corporation. It developed and sold software products to building consent authorities and provided services to local government customers.
Objective also said at the time that the acquisition of Master Business Systems annual revenue represented <5% of Objective’s total FY19 revenue.
The ComCom administers a voluntary notification regime that allows companies to apply for clearance or authorisation if they consider their planned acquisition could raise competition issues. If companies do not apply for clearance or authorisation, the ComCom can initiate an investigation into a proposed or completed acquisition under section 47.
Objective is headquartered in Sydney and works across five countries with multiple offices.
Due to the matter being before the Courts, the ComCom has said that it cannot comment further at this time.