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Commission Files Proceedings Against Software Company For Breach Of Commerce Act
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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