Software Acquisition Anti-Competitive, Says Regulator As Partial Sale Is Forced On Capita

However, the CC said that it did not have the same concerns about software for the social housing market. It said that though the two companies competed in that area as well, enough other companies also provided such software that the deal did not have the same effect on competition.

Capita attempted to convince the CC committee that it could address its concerns by maintaining both sets of products and investing both in Capita's and IBS OPENSystems' R&B software. It also said it would submit to external monitoring and put price controls in place.

The CC rejected those as solutions to the core problem, though. "The remedies proposed whereby Capita would, for example, maintain a choice of the IBS or Capita software systems for existing and new customers, continue to invest in both software systems, or waive any fixed term in any existing contract, would not restore rivalry in the R&B market and so would not address the [problem]," the committee's report said.

The CC committee said that both a full sale of the whole IBS OPENSystems business or a sale just of its R&B component would solve the competition problems. It said that it would endorse the partial sale as a "less intrusive" option.

It said, though, that it would step in to force a full separation if the R&B business was not sold quickly.

"Should a successful divestiture of the IBS R&B division not be achieved by Capita within a reasonable period, we will review whether we need to widen the scope of the divestiture package to a full divestiture of the IBS business," the committee's report said.