Victory for Vexall against Telkom’s BCX over pharmacy software dominance

The Competition Tribunal has ruled in favour of Dis-Chem-backed technology company Vexall to stop Telkom subsidiary Business Connexion (BCX) from abusing its dominant position in the pharmacy software industry.

On Wednesday, the tribunal said BCX is prohibited from selling or offering a licence for its “Unisolv” software on condition that a customer purchase value-added services from BCX. 

The ruling follows submissions made by both companies at the Competition Tribunal, adjudicates on cases brought to it by the Competition Commission, last Wednesday. 

The commission investigates abuse of dominant positions by companies and mergers and acquisitions.

Vexall had accused BCX, which holds the copyright to Unisolv — considered to be the industry-standard software for use by private retail pharmacies — of forcing its customers to purchase value-added services together with the software licence.

The Competition Act prohibits a dominant company from selling goods or services on condition that the buyer must purchase unrelated products.

About 70% of all scripts processed in SA are dispensed using Unisolv, which BCX first developed in 1993.

In the second half of 2019, Dis-Chem, a shareholder in Vexall, and a number of other pharmacies gave notice to BCX that they would no longer purchase “value-added services” from the company.

The services comprise a wide range of ICT services such as hardware and software installation, central patient profile hosting and inventory management services, among others.

The pharmacies planned to get these services from other providers such as Vexall.  

BCX countered this, saying users would not receive full software support for Unisolv if they acquired the additional services elsewhere. The company said some of these services are integral to the functioning of Unisolv as a whole and it would not be viable to unbundle these.

However, BCX said it does not object to Vexall providing nonintegral services. Vexall, in turn, argued that it should be able to provide all value-added services to Unisolv users. It added that BCX’s terms force customers not to deal with Vexall which threatens their business.

While the Competition Commission investigates the allegations, Vexall had asked the tribunal to stop BCX from its alleged uncompetitive behaviour. Vexhall said that if it cannot get this relief then it will likely have to exit the market and shut down as its customers go to BCX.

This week’s ruling will remain in force for six months, the tribunal said, adding that BCX has to pay Vexall’s costs of the legal action.

gavazam@businesslive.co.za