The Australian competition watchdog has concerns that MYOB’s proposed acquisition of Reckon Accountants Group would “substantially lessen competition.”
MYOB’s acquisition of Reckon hits hurdles with ACCC
The Australian Competition and Consumer Commission’s analysis found MYOB and Reckon’s Accountants Group, as a consolidated service provider, would likely be the only supplier of practice software suitable for medium to large accounting firms.
“If MYOB has a monopoly on this software, it would substantially lessen competition. We think there’s a significant risk for customers that prices will increase and service levels will decrease,” said ACCC commissioner Roger Featherston.
“The ACCC received feedback from the accounting industry that MYOB’s AE product and Reckon’s APS product are the only products that are capable of meeting the software needs of medium to large accounting firms,” he added.
“There are other suppliers of this software but market feedback suggests those products are less sophisticated, and that they are unlikely to be able to develop the more advanced functionality for several years at least.”
The deal is subject to regulatory clearance from both the ACCC and the New Zealand Commerce Commission.
In a statement to the ASX, MYOB chief executive Tim Reed said: “We understand that the extension by the ACCC is a standard part of their assessment process and we will continue to work with each of the regulators to enable them to complete their due diligence and provide an outcome.”
In its statement to the ASX, Reckon acknowledged the ACCC’s update, and said the company “looks forward” to a final determination by 30 May, as per the expected timeline.
Mr Reed told Accountants Daily last year he’s confident the acquisition won’t limit choice for end users.
“It’s a question of depth and breadth. So today we probably already work with all the top 100 accounting firms in some way, shape or form. So would Reckon, so would Xero, Class and BGL,” Mr Reed told Accountants Daily.
“From a breadth perspective, I’d say most of those firms use multiple technology partners. From a depth perspective, yes it will deepen our relationship, but I don’t think it will materially increase our penetration into how many accounting firms [we have] relationships with,” he said.