The ACCC has accepted a court-enforceable undertaking from logistics technology company WiseTech Global and its subsidiary to divest a fellow logistics software business.
WiseTech acquired Expedient as part of its acquisition of e2open Parent Holdings in August last year, with WiseTech and its subsidiary BluJay Solutions cleared to divest Expedient on December 30 following an ACCC investigation.
“While WiseTech informed the ACCC about the acquisition, Wisetech completed the acquisition before the ACCC conducted its review and could reach a decision, despite being aware of the significant concerns being raised,” ACCC Chair Gina Cass-Gottlieb says.
Following completion of the acquisition, the ACCC commenced an enforcement investigation to assess whether it would have the effect or likely effect of substantially lessening competition, in breach of the merger law.
The undertaking addresses the competition concerns identified by the ACCC in its investigation by restoring Expedient as an independent competitor to WiseTech. The undertaking is court enforceable and imposes strict requirements on WiseTech regarding the divestiture of Expedient.
Expedient will be sold to a purchaser approved by the ACCC on the basis that the purchaser will be able to operate the Expedient business as a viable competitor to WiseTech in the supply of logistics software in Australia.
WiseTech is Australia’s largest supplier of cloud-based enterprise application software to the global logistics industry with its core software offering, CargoWise. BluJay was part of the e2open group, and acquired Expedient in March 2020.
“The ACCC considers that WiseTech already has substantial market power in the supply of logistics software, and the acquisition has the effect of removing the competition between CargoWise and Expedient and significantly reduced the choice available to Australian customers,” Cass-Gottlieb says.
“The ACCC received significant concerns from users of logistics software during the investigation, and was concerned that the acquisition could lead to higher prices or lower quality services.
“Prior to the new merger regime coming into effect on January 1, there was no requirement for a merger party to obtain ACCC clearance before proceeding to complete an acquisition. This was one of the key concerns with the previous informal regime.
“However, under the new merger regime which commenced on January 1, merger parties are required to notify the ACCC of any acquisition that meets the thresholds and must not complete the acquisition until it has been approved by the ACCC or the Australian Competition Tribunal.”