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Competition concerns over MYOB bid to buy Reckon

Competition concerns over MYOB bid to buy Reckon Featured

A bid by accounting software firm MYOB to acquire another similar company. Reckon’s Accountants Group, could lead to a lessening of competition in this sector, the Australian Competition and Consumer Commission says.

The software that is sold by both MYOB and Reckon is used by accounting firms for tax returns, client accounting and practice operation.

“If MYOB acquired Reckon’s Accountants Group, it would likely be the only supplier of practice software suitable for medium to large accounting firms,” ACCC commissioner Roger Featherston said in a statement.

“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.”

The consumer watchdog said its initial analysis identified that medium to large accounting firms required advanced software features, such as flexibility in reporting, workflow, matter and customer management, advanced security configurations, and support for many users.

“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,” Featherston said.

“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.

“We also identified several barriers to expansion for other competitors. These include the time and cost to develop better functionality, switching costs for accounting firms, and a cautious approach from the industry towards changing to untested suppliers.”

The ACCC said submissions from interested parties in response to its statement of issues should be submitted by 13 April. A decision on the acquisition will be made on 30 May.

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Sam Varghese

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A professional journalist with decades of experience, Sam for nine years used DOS and then Windows, which led him to start experimenting with GNU/Linux in 1998. Since then he has written widely about the use of both free and open source software, and the people behind the code. His personal blog is titled Irregular Expression.

 

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