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Commission files proceedings against software company for breach of Commerce Act

Contributor:
Fuseworks Media
Fuseworks Media

The Commerce Commission has filed proceedings in the High Court in Wellington against software company Objective Corporation Limited (Objective) for contravening section 47 of the Commerce Act, which prohibits mergers which are likely to substantially lessen competition.

The Commission alleges 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.

The Commission and Objective have agreed on a settlement to resolve the proceedings. A penalty hearing in the Wellington High Court will be scheduled shortly.

As the matter is before the Court the Commission cannot comment further at this time.

Background

Objective Corporation Limited

Objective Corporation is a software company that develops and supplies software products in New Zealand, Australia, the United Kingdom, and the United States of America.

Master Business Systems Limited

Master Business Systems Limited was a company incorporated in New Zealand until it was amalgamated into Objective Corporation Solutions NZ Limited, a wholly owned subsidiary of Objective Corporation. It developed and sold software products to building consent authorities and provided services to local government customers.

Section 47 of the Commerce Act

Section 47 of the Commerce Act prohibits acquisitions that are likely to substantially lessen competition. The Commission 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 Commission can initiate an investigation into a proposed or completed acquisition under section 47.

If a person breaches section 47 they may be subject to a penalty of up to $500,000 for an individual or $5 million for a company. 

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