By Joe Peskett
A Swedish tech supplier has expressed its frustration at the Competition and Markets Authority’s (CMA) decision to break up its merger with a UK-based assistive technology provider.
Tobii, which creates eye-tracking technology for various purposes, including for disabled people, acquired Smartbox in January.
Technologies supplied by Tobii and Smartbox help people with complex speech and language needs to communicate using specialised software and devices, such as joysticks.
But the merger was challenged by the CMA earlier this year because of competition concerns.
It argued that the deal would have decreased competition and could lead to reductions in the existing product range and quality, less new product development and higher prices.
After an investigation, the CMA decided that the only effective way of addressing its competition concerns is for Tobii to sell Smartbox to a new owner, which must be approved by the CMA.
Tobii confirmed today that it will begin to divest Smarbox but noted that it “strongly disagrees” with the CMA’s decision.
The company believes that a merger of the two companies would have led to increased innovation and the possibility to provide a broader range of products to benefit users with disabilities in the UK.
Henrik Eskilsson, CEO of the Tobii Group, said: “We can only regret CMA’s decision. We are convinced that the merger would have given positive effects for the many in need of assistive technology for communication.
“However, this was a relatively small acquisition relating primarily to complementing our software portfolio. A divestiture will therefore only have a limited impact on our strategy.”
He added that the firm’s long-term financial targets “remain intact”.
The divestiture means that Smartbox is now seeking a new owner. Smartbox said that there will be no changes made to its products or how it works following the CMA’s decision.
A spokesperson for Smartbox said: “The next steps are to begin finding a suitable owner for Smartbox. The CMA puts guidelines in place to ensure the owner is the best possible fit for the Smartbox business.
“Whilst we are disappointed to not work with the great team at Tobii, we are very excited to continue our mission to create innovative technology that is delivered with our passion for service that goes above and beyond.”
Kip Meek, chair of the independent inquiry group carrying out the CMA’s investigation, said: “Competition plays a key role in driving improvements in product range and quality – making a real difference for the people who use these technologies to communicate.
“Competitive pricing also helps to make sure that public bodies aren’t paying more than they should for these technologies.
“Our investigation concluded that the loss in competition brought about by this deal could therefore have very serious effects – less choice, less product development and higher prices.
“Having carefully considered all options, we decided that only selling the entire Smartbox business would effectively address the concerns we found.”