Commission closes investigation into Datix’s acquisition of RL Solutions
Published22 Jun 2020
The Commerce Commission closed its investigation into Datix’s acquisition of RL Solutions on 10 December 2019 as its concerns with the acquisition were addressed.
A summary of the reasons outlining the Commission’s decision will be available on the Commission’s case register shortly.
In September 2018, the Commission opened an investigation into the acquisition under section 47 of the Commerce Act. Later that month, Datix completed the transaction without receiving clearance from the Commission.
At the time, Datix and RL Solutions were the only two suppliers of patient safety software used in hospitals in New Zealand. The Commission was concerned that the acquisition had resulted in a substantial lessening of competition, enabling Datix to raise prices or lower the quality of the software and related services that it supplies in New Zealand.
Datix divested several of its customers to a new supplier of patient safety software, which the Commission considered will ensure Datix continues to face meaningful competition. The Commission closed its investigation without taking further action.
Section 47 of the Commerce Act prohibits acquisitions that are likely to substantially lessen competition. The Commission administers a voluntary regime that allows firms to apply for clearance if they consider their planned acquisition could raise competition issues. If firms do not apply for clearance, the Commission can initiate an investigation into a proposed or completed merger 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 firm.