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The Australian Competition and Consumer Commission (ACCC) is now examining evidence from electronic conveyancing company Sympli, which it has claimed shows incumbent rival PEXA has made “continued provocations”, refused to engage with industry bodies and spread misinformation and falsehoods.
Sympli has also stated that the market is locked in a monopoly, accusing PEXA of shutting out competition, and limiting outcomes and opportunities for customers, clients and the wider economy.
A spokesperson for the ACCC told Mortgage Business: “We are considering the issues raised by Sympli and are not able to comment further at this time”.
Meanwhile, Sympli has welcomed the review from the regulator.
“We hope this investigation will restore order to an incredibly thorough, well managed and highly collaborative industry reform process that will deliver better outcomes for customers,” Sympli stated.
The electronic conveyancing industry is currently working to achieve national interoperability by 2023, in line with a timeline set by a state ministerial direction.
Interoperability, the ability of groups to exchange information and to operate in conjunction with each other, has been pegged as key for facilitating competition in the e-conveyancing sector.
Interoperability is supposed to allow each party in the settlement process, whether they’re a lawyer, conveyancer or financial institution, to use the electronic lodgement network operator of their choice, irrespective of what other transacting parties choose to use.
However, PEXA had proposed to delay the roll-out of interoperability for the first transaction to October 2022, from the previously agreed deadline of first quarter, 2022. As a statement from the Australian Registrars' National Electronic Conveyancing Council (ARNECC) explained, PEXA's new date would set back interoperability for all transactions to 2024.
An update from the company in late May also noted: "PEXA believes that the earlier ministerial timetable for the rollout of interoperability was not adequately linked to the scale and complexity of the work required, with a clear risk of impacts on the stability and reliability of e-conveyancing for Australian home buyers and sellers."
PEXA has also raised issues with the economic model proposed in the draft Model Operating Requirements, claiming that requiring electronic lodgement network operators to provide settlement and lodgement services to their competitor for free is "unsustainable and would put user experience at risk".
As such, the NSW Government has commissioned the NSW independent pricing regulator (IPART) to investigate and report on a pricing framework for interoperable transactions between operators.
As Sympli sees it, interoperability offers a “clear, mandated path towards competition”, but it relies on all industry stakeholders coming to the table and working together.
Sympli chief executive Philip Joyce stated that the ACCC investigation “speaks to the fact that the monopolistic behaviour of PEXA must change”.
“Our commercial viability is dependent on timely interoperability implementation. We will not sit around and watch PEXA implement further delay tactics to protect its own market power,” Mr Joyce said.
“Allowing the monopoly operator to fundamentally drive the industry effectively shuts out competition in the market and with that, value, innovation and outcomes for customers.”
Former ACCC chair Rod Sims had warned that delays to interoperability had risked placing competition in the electronic conveyancing sector beyond reach, as he asked governments for legislation and regulations that would immediately require it.
National peak industry bodies such as the Australian Banking Association, Australian Institute of Conveyancers and the Law Council of Australia, have called for a timely introduction of interoperability, in the interests of security and competition.
Sympli has indicated that it is developing the infrastructure and build requirements for interoperability.
PEXA similarly has stated: "PEXA is committed to working with ARNECC, and across the industry, to help alleviate any interoperability implementation issues prior to the commencement of any interoperable transactions."
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