ACCC raises concerns on Link Administration sale
The Australian Competition and Consumer Commission (ACCC) has cast a shadow over the proposed acquisition of Link Administration Holdings by Dye and Durham, suggesting it would cause competition concerns in the property conveyancing sector.
In a statement issued today, the ACCC described the conveyancing sector as being in a transition period as it moved towards electronic conveyancing and digitalisation – something which created concern around the transaction.
“While combining D&D and Link does not raise issues, by acquiring Link, D&D would gain the 42.77% shareholding in PEXA Group Ltd that Link currently owns. It is the potential vertical integration of D&D’s operations and PEXA that gives rise to the competition concerns.
“D&D provides information broking services, conveyancing and legal practice management software and manual property settlement services in Australia. PEXA operates an Electronic Lodgment Network which facilitates digital conveyancing settlements,” the ACCC statement said.
“Consumers may not be familiar with these companies in name, however this acquisition is relevant to anyone buying or selling property,” ACCC Deputy Chair Mick Keogh said.
Conveyancing is a critical element of property markets in Australia that affects financial settlement and title transfer. E-conveyancing has digitised and transformed this process in recent years and services throughout the conveyancing workflow are becoming increasingly integrated, including directly into the PEXA Exchange.
The proposed acquisition would align PEXA, a near monopoly provider of Electronic Lodgement Network services, with D&D, a significant supplier of software to lawyers and conveyancers, significantly increasing vertical integration in this industry.
“Given PEXA’s position as the only fully operational Electronic Lodgement Network, the ACCC will closely scrutinise any transaction that would result in vertical integration between PEXA and other industry participants,” Mr Keogh said.
While the transaction will not provide D&D with majority control of PEXA, the ACCC considers preferential conduct may benefit both D&D and PEXA.
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