THE competition watchdog has raised concerns about Ernst & Young's proposal to sell its large enterprise tax software division to the Australian subsidiary of Thomson Reuters.
The Australian Competition and Consumer Commission (ACCC) has formed a preliminary view that the sale would damage competition in Australia’s large enterprise tax software market.

Today the regulator called for comment in an issues paper about the proposed merger.

"The ACCC’s preliminary view is that the proposed acquisition is likely to substantially lessen competition in breach of section 50 of the (Trade Practices) Act in relation to the supply of income tax compliance software to large companies.

"The likely effect of the proposed acquisition is that the merged entity would have an increased ability to raise prices to customers, reduce the quality of its products and services, and/or delay development in its products and services," the ACCC wrote in its issues paper.

"From its market inquiries to date, the ACCC understands that Thomson Reuters and Ernst & Young are the two largest suppliers of income tax compliance software for large companies in Australia, and together hold a very substantial share of the national market for income tax compliance software for large companies."

This article is available in full from The Australian.