Capita-IBS Case Study

In its investigation of the acquisition of IBS OPENsystems by Capita Group, the Competition Commission found that a UK market existed for a single software system and its related services, the Revenue & Benefits (R&B) software system. A substantial lessening of competition in this market was found to result from the merger, the remedy of which required Capita to divest IBS’ Revenue & Benefits software system and to assign to any approved purchaser the intellectual property rights of software codes necessary to operate the IBS R&B business.

The case is of interest for its high quality analysis of a market and for its finding of a narrow and relatively small market, namely for a legacy software or software and related services market. If this type of approach is followed in future cases, and there is every reason to think that it will be, it stands as a precedent for defining the market as comprising a particular type of software application.

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