Bottomline Takeover Raises New Concerns With UK Competition Regs

The U.K. Competition and Markets Authority (CMA) is raising new concerns about Bottomline Technologies’ acquisition of Experian Payments Gateway (EPG), warning in a press release that the takeover may amount to rising prices.

The CMA announced this week that it had completed Phase 1 of its investigation into the acquisition, noting that it is “concerned that the new, merged company may increase prices, reduce product availability or reduce its investment in innovation.” The watchdog concluded that if EPG had not been acquired by Bottomline, the firm likely would have been acquired by a different company in a deal that would have boosted market competition.

Bottomline now has until Oct. 14 to propose remedies to these concerns, the regulator said. If those remedies are not provided, the CMA will begin Phase 2 of its investigation.

“Payment software is critical to many businesses in the U.K. for managing payments, including direct debits and paying their staff,” said CMA Senior Director of Mergers Joel Bamford in a statement. “Bottomline is already the largest supplier and has purchased a rival who is trusted by many large businesses, with few remaining competitors left in the market.

“Our investigation has shown that other options for the EPG business were available, which could have resulted in more competition in the future,” Bamford continued. “We are therefore concerned that this transaction could lead to prices going up or less development of current software.”

Bottomline announced in March its acquisition of EPG, a part of Experian, in a $12.5 million deal. Months later, the CMA ordered Bottomline to ensure that data between the two enterprise software companies would be segregated to ensure that sensitive information is protected.

According to CBR Online reports this week, Bottomline is currently the largest B2B supplier of Bacs payment software in the U.K., allowing corporates to initiate and process supplier and payroll payments via the Bacs and Faster Payments schemes. EPG is its largest rival, reports noted.