The ACCC will not oppose the proposed acquisition of Nuance Inc. by Microsoft Corporation.
Nuance supplies speech recognition and transcription software primarily to the healthcare market, as well as customer engagement software that enables businesses to automate their customer service interactions.
"Microsoft and Nuance do not directly compete in healthcare transcription software," ACCC Commissioner Stephen Ridgeway said.
"Microsoft does not currently provide this specialised technology, and it appears unlikely to become a strong competitor to Nuance. This transaction is therefore unlikely to substantially lessen competition in the healthcare transcription market."
The ACCC's investigation found that healthcare transcription products are not currently widely used in Australia. However Nuance currently faces some competition from alternative healthcare transcription suppliers and may face competition in future from other large technology firms expanding in the health sector.
The ACCC also concluded that the proposed acquisition was unlikely to substantially lessen competition in the customer engagement solutions market.
Microsoft does not compete with Nuance in the supply of these products to businesses because its tools are aimed at software developers, rather than finished products that can be used by businesses engaging with customers.
"We found that there is strong existing competition in customer engagement solutions. There are multiple comparable alternatives to Nuance, and barriers to entry are not high," Mr Ridgeway said.
The ACCC also concluded that the proposed acquisition would not enable Microsoft to prevent Nuance or Microsoft's rivals from competing effectively.
"Microsoft supplies software in customer relationship management, productivity, video conferencing and cloud computing that are compatible with Nuance's products. However, if Microsoft attempted to limit the access of Nuance's competitors to Microsoft products, they could easily switch to alternative suppliers or reach customers in other ways," Mr Ridgeway said.
"At the same time, Microsoft would not have any incentive to limit its competitors' access to Nuance's medical transcription software, because the medical transcription market is very small in comparison to the key markets that Microsoft competes in."
"The ACCC will continue to pay very close attention to acquisitions by major technology companies. There has been a pattern of buying out potential competition threats which the ACCC has expressed concerns about recently, but this transaction is not one of concern to the ACCC."
Background
Nuance provides healthcare transcription software through its Dragon Medical One product and also supplies non-healthcare transcription through its Dragon Professional and Dragon Personal products. All are currently available in Australia.
Healthcare transcription software allows healthcare professionals to dictate medical notes into a device and have them digitally transcribed into a desktop application in real time. This technology is highly specialised because it accurately and reliably recognises medical terminology and syntax, unlike non-healthcare transcription products.
The ACCC understands that healthcare transcription technology is widely used in the US and other international markets, but is not currently prevalent in Australia.
Microsoft does not have its own healthcare transcription software offering, though it does have some generalised speech-to-text capabilities available through its Office and Teams products.
Customer engagement software is technology that enables businesses to automate their customer service interactions. It is used by a variety of businesses to automate their interactions with customers. Nuance provides products for digital engagement ('chatbots' and similar tools), voice engagement (human-like phone calls) and voice biometric verification.
Microsoft offers some of this technology as part of its own product suites (Office, Dynamics, Azure and Power Platform) or as tools for developers to build their own end-user software applications.
