Credit: Dreamstime
ASX-listed Objective Corporation and the New Zealand Commerce Commission have agreed to settle after the company breached kiwi competition law.
Objective told investors on 21 January it agreed a NZ$1.54 million (A$1.44M) settlement with the regulator and would also admit it breached section 47 of the Commerce Act by not seeking clearance before buying Feilding-based Master Business Systems in 2019.
Objective also said the regulator accepted the breach was not deliberate.
Both parties would now recommend the High Court accept the settlement, but because proceedings had already been filed, the court still has the ultimate say.
The Commerce Commission opened an investigation into the A$5.4 million acquisition in May 2020 to probe whether the deal would be likely to substantially lessen competition in the New Zealand market for the supply of software to local councils for the digitisation of their consenting processes.
Both companies were suppliers of software used to lodge and manage building consent applications. MBS' systems were used by 52 per cent of local councils in New Zealand, 35 in total.
"The focus of the investigation will be on the extent of competition that is likely to have been lost between Objective and MBS as a result of the acquisition, and the extent to which the merged entity will likely be constrained from raising prices or lowering the quality of either its products or associated services," the commission said at the time.
Under the terms of the agreement, if it is accepted by the court, Objective will not be required to divest the MBS business and both parties would pay their own costs.
Objective told shareholders it settled to deliver clarity and certainty to all stakeholders so it could move forward and focus on innovation and hiring.
Objective is currently developing a new cloud based consenting system called Objective Build which will be progressively released this year. The new system would speed the consenting process and deliver greater transparency and better adherence to building standards, the company said. It would also play a critical role in helping to address the shortage of housing in New Zealand
The Commission said a penalty hearing would be scheduled shortly in the Wellington High Court. However, because the matter was still before the court it could not comment further.
Tony Walls founded Objective in 1987 and has been chairman of the board and chief executive since 2006.
