Merger of tech firms ‘could stifle innovation’

The Competition and Markets Authority has raised concerns that a Sheffield-headquartered assistive technology firm’s £11m acquisition of a competitor may lead to less choice, higher prices and reduced innovation.

Tobii, which has its UK headquarters in Sheffield, announced in August that it was looking to acquire Smartbox of Worcester, which employs 70 people.

Tobii and Smartbox design and supply technology to enable people with complex speech and language needs to communicate – known as augmentative and assistive communication solutions. These solutions include specialised hardware and software, such as speech generating devices, eye gaze cameras and language systems.

The Competition and Markets Authority (CMA) has found that Tobii and Smartbox are leading suppliers in this sector and are each other’s main competitor. The CMA is concerned that the merged company would face little competition, which could lead to a reduced range of products being offered, higher prices and fewer new products being developed.

Mike Walker, Chief Economic Advisor, said: “These are vital technologies bought on behalf of vulnerable people by the NHS, charities and schools.

“We believe that the merger could stifle innovation and lead to less choice. We will launch a further in-depth investigation if the companies fail to address our concerns.”

The CMA said that protecting vulnerable consumers is at the heart of the its Annual Plan, as reflected by its other recent work in areas such as funerals, care homes and online gambling.

Tobii and Smartbox now have until 1 February to offer solutions to resolve the CMA’s concerns, otherwise the merger will be referred for a Phase 2 investigation.

In August, Tobii said that the £11m acquisition was expected to be closed on October 1, 2018.

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