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“It is very important that before there is a privatisation that confers a private new monopoly, it is very important to have sufficient regulatory framework,” she said.
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Smith said he would continue pursuing the issue.
“We will continue to shine a light on sectors where competition can be improved and await the outcome of the ACCC’s assessment with great interest,” the senator said.
The allegations of anti-competitive behaviour arose last year when ARNECC requested specific information from the banks on the functions provided by PEXA, which is valued at $2.5 billion and is the only provider of e-conveyancing transactions, which now account for 88 per cent of property transfers in Australia and 99 per cent of mortgages refinanced.
PEXA chief commercial officer Les Vance wrote a letter to the banks, via the Australian Banking Association, which said: “We appreciate you have and should continue to advise the regulator on the outcomes you are seeking in an interoperable regime and the gaps in functionality of which you are concerned.
“However, PEXA has intellectual property rights over those important functions that we have developed in consultation with our lending institution customers over the past decade. It is not reasonable that you are being asked to outline the functionality of those systems to the regulator, especially as this could lead to disclosure of our company’s intellectual property.”
PEXA asked the banks to refer the regulator back to PEXA on the queries.
The following month, the banks cancelled a meeting with PEXA’s rival, the ASX-backed Sympli, due to the uncertainty over whether they could discuss information which PEXA was claiming as its own intellectual property.
Interoperability would allow the parties involved in settling a property transaction – lawyers, conveyancers and banks – to use any service provider, instead of having to use PEXA, which was originally a venture between Australia’s largest banks and various state governments. It was privatised in 2019.
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In June, ARNECC, the conveyancing regulator, effectively abandoned plans to introduce competition next year after state government ministers said some of the intended reforms needed federal intervention. The e-conveyancing sector is expected to generate fees totalling $430 million by the 2025 financial year.
PEXA had warned the regulator in July last year that it was now a public company and its assets were “no longer available for government bodies to disburse” without compensation.
“It is incorrect to make a blanket assumption that exchange of these additional data would not infringe PEXA IP rights,” the ASX-listed group said.
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